UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED
MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number 811-04708
---------------------------------------------
SunAmerica Income Funds
--------------------------------------------------------------------------------
(Exact name of registrant as specified in charter)
Harborside 5, 185 Hudson Street, Suite 3300, Jersey City, NJ 07311
--------------------------------------------------------------------------------
(Address of principal executive offices) (Zip code)
John T. Genoy
Senior Vice President
SunAmerica Asset Management, LLC
Harborside 5,
185 Hudson Street, Suite 3300,
Jersey City, NJ 07311
--------------------------------------------------------------------------------
(Name and address of agent for service)
Registrant's telephone number, including area code: (201) 324-6414
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Date of fiscal year end: March 31
--------------------------
Date of reporting period: September 30, 2017
-------------------------
Item 1. Reports to Stockholders
SEMI-ANNUAL REPORT 2017
SUNAMERICA
Income Funds
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Table of Contents
SHAREHOLDER LETTER................... 2
EXPENSE EXAMPLE...................... 4
STATEMENTS OF ASSETS AND LIABILITIES. 6
STATEMENTS OF OPERATIONS............. 8
STATEMENTS OF CHANGES IN NET ASSETS.. 9
FINANCIAL HIGHLIGHTS................. 10
PORTFOLIO OF INVESTMENTS............. 13
NOTES TO FINANCIAL STATEMENTS........ 67
APPROVAL OF ADVISORY AGREEMENTS...... 82
Shareholder Letter -- (unaudited)
Dear Shareholders,
We are pleased to present this semi-annual update for the SunAmerica Income
Funds for the six months ended September 30, 2017. It was a period wherein
fixed income market performance was primarily driven by elevated political and
geopolitical uncertainty, muted inflation data and incrementally more hawkish
monetary policy among developed markets' central banks./*/ For the semi-annual
period overall, the Bloomberg Barclays U.S. Aggregate Bond Index,/**/ a broad
measure of the U.S. fixed income market, returned 2.31%.
In the second quarter of 2017, when the semi-annual period began, global fixed
income markets generated strong gains as bouts of elevated political
uncertainty kept a lid on government bond yields. In the U.S., political
controversies - in particular, the ongoing investigation into alleged
involvement by Russia in the 2016 presidential election - led to a short-lived
dip in risk assets. Elections in France and the U.K. also presented potential
sources of volatility but proved benign in the aftermath. On the monetary
policy front, the U.S. Federal Reserve (the "Fed") raised interest rates by 25
basis points+ in June 2017, projected an additional hike later in 2017 and laid
out a plan for tapering its asset purchases. Comments from the Bank of England
indicated rate hikes may be looming in the U.K. However, even as it noted
improved Eurozone growth, the European Central Bank (ECB) lowered its inflation
forecasts, triggering speculation it might postpone the tapering of its asset
purchases expected to begin later in 2017. For the second calendar quarter
overall, sovereign yield curves flattened across most developed markets,
meaning the differential between short-term and long-term yields narrowed.
Short-term yields increased - especially in Germany, the U.K. and Canada -
driven by hawkish comments from their respective central banks. However, a lack
of global inflation suppressed long-term yields. Intermediate and long-term
U.S. Treasury yields declined on diminished expectations of fiscal stimulus.
Japanese government bond yields, anchored by the Bank of Japan's
yield-targeting policy, were little changed. Globally, most spread, or
non-government, sectors outperformed government bonds. Notably, despite
concerns about prospects for retailers, particularly in the U.S., generally
solid corporate earnings and continued demand for yield-producing assets
supported credit markets, and spreads, or yield differentials to government
bonds, tightened.
Global fixed income markets generated positive returns in the third quarter of
2017. Escalating geopolitical tensions between the U.S. and North Korea and
disappointments in inflation data helped to contain the increase in sovereign
yields prompted by central bank policy normalization.++ Monetary policy
continued along an incrementally more hawkish path. The Fed announced it would
begin tapering its asset purchases in October 2017 and continued to project
another rate hike later in 2017. The ECB attempted to push back against the
then-recent strength of the euro, which was hampering its ability to achieve
higher inflation. Strong economic growth and inflation data prompted the Bank
of Canada to raise rates for the first time in seven years. Meanwhile, the Bank
of England signaled it was close to raising rates to contain surging inflation,
despite uncertainty about the post-Brexit growth outlook. For the third
calendar quarter overall, sovereign yields increased across most developed
markets, with the biggest moves in Canada, Australia and the U.K. U.S. Treasury
yields also increased, but the yield curve flattened as longer-term yields
increased only marginally due to stubbornly low inflation. Japanese government
bond yields, anchored by the Bank of Japan's yield-targeting policy, were
little changed. Globally, most spread sectors outperformed U.S. Treasuries.
Generally strong economic data, a rally in commodity prices and ongoing demand
for yield especially supported credit markets, and spreads tightened further.
For the semi-annual period overall, U.S. Treasury securities posted positive
returns, with the yield on the 10-year U.S. Treasury declining approximately
seven basis points to 2.33% by the end of September 2017. The U.S. Treasury
yield curve, or spectrum of maturities, flattened slightly during the six
months ended September 30, 2017, as yields on shorter-term maturities generally
rose and yields on intermediate- and longer-term maturities fell. Non-U.S.
Treasury sectors generally outperformed U.S. Treasuries. High yield corporate
bonds, sovereign emerging markets debt and investment grade corporate bonds
outperformed U.S. Treasuries most. Commercial mortgage-backed securities,
agency securities, asset-backed securities and mortgage-backed securities also
outperformed U.S. Treasuries, albeit more modestly.
2
On the following pages, you will find financial statements and portfolio
information for each of the SunAmerica Income Funds during the semi-annual
period ended September 30, 2017.
We thank you for being a part of the SunAmerica Income Funds. We value your
ongoing confidence in us and look forward to serving your investment needs in
the future. As always, if you have any questions regarding your investments,
please contact your financial adviser or get in touch us directly at
800-858-8850 or via our website, www.aig.com/funds.
Sincerely,
The SunAmerica Income Funds Investment Professionals
Timothy Campion Robert Vanden Assem David L. Albrycht
Kara Murphy Anders Faergemann Frank Ossino
Andrew Sheridan Dana Burns Jonathan Stanley
Jane Algieri John Yovanovic
--------
Past performance is no guarantee of future results.
* Hawkish policy tends to suggest higher interest rates; opposite of dovish.
**The Bloomberg Barclays U.S. Aggregate Bond Index represents securities that
are SEC-registered, taxable and dollar denominated. The index covers the U.S.
investment-grade fixed-rate bond market, with index components for government
and corporate securities, mortgage pass-through securities and asset-backed
securities. Indices are not managed and an investor cannot invest directly in
an index.
+ A basis point is 1/100/th/ of a percentage point.
++Balance sheet normalization refers to the steps the Fed will take to reverse
quantitative easing and reduce the substantial monetary accommodation it has
provided to the economy since the financial crisis began in 2007.
3
SunAmerica Income Funds
EXPENSE EXAMPLE -- September 30, 2017 -- (unaudited)
Disclosure of Portfolio Expenses in Shareholder Reports
As a shareholder of a fund (each, a "Fund" and collectively the "Funds") in the
SunAmerica Income Funds (the "Trust"), you may incur two types of costs: (1)
transaction costs, including sales charges (loads) on purchase payments,
contingent deferred sales charges and (2) ongoing costs, including management
fees, distribution and service fees and other Fund expenses. The example set
forth below is intended to help you understand your ongoing costs (in dollars)
of investing in the Funds and to compare these costs with the ongoing costs of
investing in other mutual funds. The Example is based on an investment of
$1,000 invested at April 1, 2017 and held until September 30, 2017.
Actual Expenses
The "Actual" section of the table provides information about actual account
values and actual expenses. You may use the information in these columns,
together with the amount you invested, to estimate the expenses that you paid
over the period. Simply divide your account value by $1,000 (for example, an
$8,600 account value divided by $1,000 = 8.6), then multiply the result by the
number in the column under the heading entitled "Expenses Paid During the Six
Months Ended September 30, 2017" to estimate the expenses you paid on your
account during this period. The "Expenses Paid During the Six Months Ended
September 30, 2017" column and the "Annualized Expense Ratio" column do not
include small account fees that may be charged if your account balance is below
$500 ($250 for retirement plan accounts). In addition, the "Expenses Paid
During the Six Months Ended September 30, 2017" column and the "Annualized
Expense Ratio" column do not include administrative fees that may apply to
qualified retirement plan accounts. See the Funds' prospectuses, your
retirement plan document and/or materials from your financial adviser for a
full description of these fees. Had these fees been included, the "Expenses
Paid During the Six Months Ended September 30, 2017" column would have been
higher and the "Ending Account Value" column would have been lower.
Hypothetical Example for Comparison Purposes
The "Hypothetical" section of the table provides information about hypothetical
account values and hypothetical expenses based on each Fund's actual expense
ratio and an annual rate of return of 5% before expenses, which is not the
Fund's actual return. The hypothetical account values and expenses may not be
used to estimate the actual ending account balance or expenses you paid for the
period. You may use this information to compare the ongoing costs of investing
in the Funds and other funds. To do so, compare this 5% hypothetical example
with the 5% hypothetical examples that appear in the shareholder reports of
other funds. The "Expenses Paid During the Six Months Ended September 30, 2017"
column and the "Annualized Expense Ratio" column do not include small account
fees that may be charged if your account balance is below $500 ($250 for
retirement plan accounts). In addition, the "Expenses Paid During the Six
Months Ended September 30, 2017" column and the "Annualized Expense Ratio"
column do not include administrative fees that may apply to qualified
retirement plan accounts and accounts held through financial institutions. See
the Funds' prospectuses, your retirement plan document and/or materials from
your financial adviser for a full description of these fees. Had these fees
been included, the "Expenses Paid During the Six Months Ended September 30,
2017" column would have been higher and the "Ending Account Value" column would
have been lower.
Please note that the expenses shown in the table are meant to highlight your
ongoing costs only and do not reflect any transaction costs, including sales
charges on purchase payments, contingent deferred sales charges, small account
fees and administrative fees, if applicable to your account. Please refer to
the Funds' prospectus, your retirement plan document and/or material from your
financial adviser, for more information. Therefore, the "Hypothetical" example
is useful in comparing ongoing costs only, and will not help you determine the
relative total costs of owning different funds. In addition, if these
transaction costs and other fees were included, your costs would have been
higher.
4
SunAmerica Income Funds
EXPENSE EXAMPLE -- September 30, 2017 -- (unaudited) (continued)
Actual Hypothetical
------------------------------------------ ------------------------------------------
Ending Account
Ending Account Expenses Paid Value using Expenses Paid
Value using During the a Hypothetical During the
Beginning Actual Six Months Beginning 5% Annual Six Months
Account Value Return at Ended Account Value Return at Ended Annualized
at April 1, September 30, September 30, at April 1, September 30, September 30, Expense
Fund 2017 2017 2017* 2017 2017 2017* Ratio*
---- ------------- -------------- ------------- ------------- -------------- ------------- ----------
AIG U.S. Government Securities
Class A#..................... $1,000.00 $1,006.89 $ 4.98 $1,000.00 $1,020.10 $ 5.01 0.99%
Class C#..................... $1,000.00 $1,003.61 $ 8.24 $1,000.00 $1,016.85 $ 8.29 1.64%
AIG Strategic Bond
Class A...................... $1,000.00 $1,035.35 $ 6.79 $1,000.00 $1,018.40 $ 6.73 1.33%
Class B...................... $1,000.00 $1,031.85 $10.24 $1,000.00 $1,014.99 $10.15 2.01%
Class C...................... $1,000.00 $1,034.91 $10.10 $1,000.00 $1,015.14 $10.00 1.98%
Class W...................... $1,000.00 $1,039.40 $ 5.88 $1,000.00 $1,019.30 $ 5.82 1.15%
AIG Flexible Credit
Class A...................... $1,000.00 $1,025.43 $ 7.16 $1,000.00 $1,018.00 $ 7.13 1.41%
Class C...................... $1,000.00 $1,022.08 $10.49 $1,000.00 $1,014.69 $10.45 2.07%
Class W...................... $1,000.00 $1,026.53 $ 6.15 $1,000.00 $1,019.00 $ 6.12 1.21%
--------
* Expenses are equal to each Fund's annualized expense ratio multiplied by the
average account value over the period, multiplied by 183 days then divided
by 365 days (to reflect the one-half year period). These ratios do not
reflect transaction costs, including sales charges on purchase payments,
contingent deferred sales charges, small account fees and administrative
fees, if applicable to your account. Please refer to your Prospectus, your
retirement plan documents and/or materials from your financial adviser for
more information.
# During the stated period, the investment advisor either waived a portion of
or all of the fees and assumed a portion of or all expenses for the Funds.
As a result, if these fees and expenses had not been waived or assumed, the
"Actual/Hypothetical Ending Account Value" would have been lower and the
"Actual/Hypothetical Expenses Paid During the Six Months Ended September 30,
2017" and the "Annualized Expense Ratio" would have been higher.
5
SunAmerica Income Funds
STATEMENT OF ASSETS AND LIABILITIES -- September 30, 2017 -- (unaudited)
AIG U.S. Government
Securities Fund
-------------------
ASSETS:
Investments at value (unaffiliated)*.......................................................... $156,950,781
Repurchase agreements (cost approximates value)............................................... 1,718,000
Cash.......................................................................................... 310
Foreign cash*................................................................................. --
Receivable for:
Shares of beneficial interest sold.......................................................... 41,167
Dividends and interest...................................................................... 556,645
Investments sold............................................................................ --
Investments sold on an extended settlement basis............................................ --
Prepaid expenses and other assets............................................................. 5,533
Due from investment adviser for expense reimbursements/fee waivers............................ 115,403
Unrealized appreciation on forward foreign currency contracts................................. --
------------
TOTAL ASSETS.................................................................................. 159,387,839
------------
LIABILITIES:
Payable for:
Shares of beneficial interest redeemed...................................................... 92,332
Investments purchased....................................................................... --
Investments purchased on an extended settlement basis....................................... --
Investment advisory and management fees..................................................... 86,119
Distribution and service maintenance fees................................................... 55,126
Transfer agent fees and expenses............................................................ 35,053
Trustees' fees and expenses................................................................. 1,517
Other accrued expenses...................................................................... 111,458
Line of Credit.............................................................................. --
Dividends Payable............................................................................. 5,018
Unrealized depreciation on forward foreign currency contracts................................. --
------------
TOTAL LIABILITIES............................................................................. 386,623
------------
NET ASSETS.................................................................................... $159,001,216
============
NET ASSETS REPRESENTED BY:
Shares of beneficial interest, $0.01.......................................................... $ 174,172
Paid-in capital............................................................................... 173,972,433
------------
174,146,605
Accumulated undistributed net investment income (loss)........................................ (633,311)
Accumulated undistributed net realized gain (loss) on investments, futures contracts, options
contracts, securities sold short, and foreign exchange transactions.......................... (19,047,300)
Unrealized appreciation (depreciation) on investments......................................... 4,535,222
Unrealized foreign exchange gain (loss) on other assets and liabilities....................... --
------------
NET ASSETS.................................................................................... $159,001,216
============
*Cost
Investments (unaffiliated).................................................................. $152,415,559
============
Foreign cash................................................................................ $ --
============
AIG Strategic Bond
Fund
------------------
ASSETS:
Investments at value (unaffiliated)*.......................................................... $365,639,350
Repurchase agreements (cost approximates value)............................................... 2,731,000
Cash.......................................................................................... 416,957
Foreign cash*................................................................................. 121,798
Receivable for:
Shares of beneficial interest sold.......................................................... 1,256,978
Dividends and interest...................................................................... 4,168,524
Investments sold............................................................................ 4,061,324
Investments sold on an extended settlement basis............................................ 576,026
Prepaid expenses and other assets............................................................. 6,368
Due from investment adviser for expense reimbursements/fee waivers............................ 843
Unrealized appreciation on forward foreign currency contracts................................. 143,363
------------
TOTAL ASSETS.................................................................................. 379,122,531
------------
LIABILITIES:
Payable for:
Shares of beneficial interest redeemed...................................................... 1,514,063
Investments purchased....................................................................... 2,777,222
Investments purchased on an extended settlement basis....................................... 5,011,553
Investment advisory and management fees..................................................... 196,235
Distribution and service maintenance fees................................................... 171,325
Transfer agent fees and expenses............................................................ 65,412
Trustees' fees and expenses................................................................. --
Other accrued expenses...................................................................... 194,558
Line of Credit.............................................................................. --
Dividends Payable............................................................................. 47,403
Unrealized depreciation on forward foreign currency contracts................................. 71,704
------------
TOTAL LIABILITIES............................................................................. 10,049,475
------------
NET ASSETS.................................................................................... $369,073,056
============
NET ASSETS REPRESENTED BY:
Shares of beneficial interest, $0.01.......................................................... $ 1,064,523
Paid-in capital............................................................................... 436,997,470
------------
438,061,993
Accumulated undistributed net investment income (loss)........................................ (1,753,139)
Accumulated undistributed net realized gain (loss) on investments, futures contracts, options
contracts, securities sold short, and foreign exchange transactions.......................... (71,899,610)
Unrealized appreciation (depreciation) on investments......................................... 4,581,165
Unrealized foreign exchange gain (loss) on other assets and liabilities....................... 82,647
------------
NET ASSETS.................................................................................... $369,073,056
============
*Cost
Investments (unaffiliated).................................................................. $361,058,185
============
Foreign cash................................................................................ $ 121,413
============
AIG Flexible Credit
Fund
-------------------
ASSETS:
Investments at value (unaffiliated)*.......................................................... $371,103,101
Repurchase agreements (cost approximates value)............................................... --
Cash.......................................................................................... --
Foreign cash*................................................................................. 7,545
Receivable for:
Shares of beneficial interest sold.......................................................... 1,762,134
Dividends and interest...................................................................... 4,184,709
Investments sold............................................................................ 3,636,738
Investments sold on an extended settlement basis............................................ 5,198,161
Prepaid expenses and other assets............................................................. 5,601
Due from investment adviser for expense reimbursements/fee waivers............................ 3,254
Unrealized appreciation on forward foreign currency contracts................................. --
------------
TOTAL ASSETS.................................................................................. 385,901,243
------------
LIABILITIES:
Payable for:
Shares of beneficial interest redeemed...................................................... 885,331
Investments purchased....................................................................... 1,348,636
Investments purchased on an extended settlement basis....................................... 13,636,466
Investment advisory and management fees..................................................... 225,094
Distribution and service maintenance fees................................................... 121,420
Transfer agent fees and expenses............................................................ 70,788
Trustees' fees and expenses................................................................. --
Other accrued expenses...................................................................... 140,725
Line of Credit.............................................................................. 1,258,824
Dividends Payable............................................................................. 352,525
Unrealized depreciation on forward foreign currency contracts................................. --
------------
TOTAL LIABILITIES............................................................................. 18,039,809
------------
NET ASSETS.................................................................................... $367,861,434
============
NET ASSETS REPRESENTED BY:
Shares of beneficial interest, $0.01.......................................................... $ 1,065,883
Paid-in capital............................................................................... 414,449,220
------------
415,515,103
Accumulated undistributed net investment income (loss)........................................ 19,075
Accumulated undistributed net realized gain (loss) on investments, futures contracts, options
contracts, securities sold short, and foreign exchange transactions.......................... (48,966,613)
Unrealized appreciation (depreciation) on investments......................................... 1,294,322
Unrealized foreign exchange gain (loss) on other assets and liabilities....................... (453)
------------
NET ASSETS.................................................................................... $367,861,434
============
*Cost
Investments (unaffiliated).................................................................. $369,808,779
============
Foreign cash................................................................................ $ 7,998
============
See Notes to Financial Statements
6
SunAmerica Income Funds
STATEMENT OF ASSETS AND LIABILITIES -- September 30, 2017 --
(unaudited) (continued)
AIG U.S. Government
Securities Fund
-------------------
Class A (unlimited shares authorized):
Net assets......................................................................................... $142,740,825
Shares of beneficial interest issued and outstanding............................................... 15,634,979
Net asset value and redemption price per share (excluding any applicable contingent deferred sales
charge) .......................................................................................... $ 9.13
Maximum sales charge (4.75% of offering price)..................................................... $ 0.46
------------
Maximum offering price to public................................................................... $ 9.59
============
Class B (unlimited shares authorized):
Net assets......................................................................................... $ --
Shares of beneficial interest issued and outstanding............................................... --
Net asset value, offering and redemption price per share (excluding any applicable contingent
deferred sales charge)............................................................................ $ --
============
Class C (unlimited shares authorized):
Net assets......................................................................................... $ 16,260,391
Shares of beneficial interest issued and outstanding............................................... 1,782,181
Net asset value, offering and redemption price per share (excluding any applicable contingent
deferred sales charge)............................................................................ $ 9.12
============
Class W (unlimited shares authorized):
Net assets......................................................................................... $ --
Shares of beneficial interest issued and outstanding............................................... --
Net asset value, offering and redemption price per share........................................... $ --
============
AIG Strategic Bond
Fund
------------------
Class A (unlimited shares authorized):
Net assets......................................................................................... $175,079,952
Shares of beneficial interest issued and outstanding............................................... 50,545,170
Net asset value and redemption price per share (excluding any applicable contingent deferred sales
charge) .......................................................................................... $ 3.46
Maximum sales charge (4.75% of offering price)..................................................... $ 0.17
------------
Maximum offering price to public................................................................... $ 3.63
============
Class B (unlimited shares authorized):
Net assets......................................................................................... $ 28,426,508
Shares of beneficial interest issued and outstanding............................................... 8,210,863
Net asset value, offering and redemption price per share (excluding any applicable contingent
deferred sales charge)............................................................................ $ 3.46
============
Class C (unlimited shares authorized):
Net assets......................................................................................... $109,683,567
Shares of beneficial interest issued and outstanding............................................... 31,552,333
Net asset value, offering and redemption price per share (excluding any applicable contingent
deferred sales charge)............................................................................ $ 3.48
============
Class W (unlimited shares authorized):
Net assets......................................................................................... $ 55,883,029
Shares of beneficial interest issued and outstanding............................................... 16,143,954
Net asset value, offering and redemption price per share........................................... $ 3.46
============
AIG Flexible Credit
Fund
-------------------
Class A (unlimited shares authorized):
Net assets......................................................................................... $147,088,865
Shares of beneficial interest issued and outstanding............................................... 42,694,728
Net asset value and redemption price per share (excluding any applicable contingent deferred sales
charge) .......................................................................................... $ 3.45
Maximum sales charge (4.75% of offering price)..................................................... $ 0.17
------------
Maximum offering price to public................................................................... $ 3.62
============
Class B (unlimited shares authorized):
Net assets......................................................................................... $ --
Shares of beneficial interest issued and outstanding............................................... --
Net asset value, offering and redemption price per share (excluding any applicable contingent
deferred sales charge)............................................................................ $ --
============
Class C (unlimited shares authorized):
Net assets......................................................................................... $ 72,934,720
Shares of beneficial interest issued and outstanding............................................... 21,039,312
Net asset value, offering and redemption price per share (excluding any applicable contingent
deferred sales charge)............................................................................ $ 3.47
============
Class W (unlimited shares authorized):
Net assets......................................................................................... $147,837,849
Shares of beneficial interest issued and outstanding............................................... 42,854,230
Net asset value, offering and redemption price per share........................................... $ 3.45
============
See Notes to Financial Statements
7
SunAmerica Income Funds
STATEMENT OF OPERATIONS -- For the six months ended September 30, 2017
-- (unaudited)
AIG U.S. Government AIG Strategic Bond
Securities Fund Fund
------------------- ------------------
INVESTMENT INCOME:
Dividends (unaffiliated).......................................................... $ -- $ 9,733
Interest (unaffiliated)........................................................... 1,630,326 8,240,723
---------- -----------
Total investment income*......................................................... 1,630,326 8,250,456
---------- -----------
EXPENSES:
Investment advisory and management fees............................................. 536,793 1,184,400
Distribution and Service maintenance fees:
Class A........................................................................... 245,660 297,613
Class B........................................................................... -- 146,194
Class C........................................................................... 87,790 587,016
Service fee -- Class W.............................................................. -- 35,837
Transfer agent fees:
Class A........................................................................... 178,199 197,951
Class B........................................................................... -- 33,650
Class C........................................................................... 22,908 133,007
Class W........................................................................... -- 53,110
Registration fees:
Class A........................................................................... 14,726 11,346
Class B........................................................................... -- 5,856
Class C........................................................................... 12,670 10,248
Class W........................................................................... -- 8,052
Custodian and accounting fees....................................................... 18,117 53,253
Reports to shareholders............................................................. 21,777 40,809
Audit and tax fees.................................................................. 26,901 34,953
Legal fees.......................................................................... 10,065 11,529
Trustees' fees and expenses......................................................... 3,477 7,137
Interest expense.................................................................... -- 42
Other expenses...................................................................... 14,695 19,846
---------- -----------
Total expenses before fee waivers, expense reimbursements and expense recoupments. 1,193,778 2,871,849
Net (fees waived and expenses reimbursed)/recouped by investment advisor (Note 3). (318,744) --
---------- -----------
Net expenses...................................................................... 875,034 2,871,849
---------- -----------
Net investment income (loss)........................................................ 755,292 5,378,607
---------- -----------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS AND FOREIGN CURRENCIES:
Net realized gain (loss) on:
Investments (unaffiliated)........................................................ (671,374) 5,349,809
Forward contracts................................................................. -- (2,582,670)
Net realized foreign exchange gain (loss) on other assets and liabilities........... -- 15,575
---------- -----------
Net realized gain (loss) on investments and foreign currencies...................... (671,374) 2,782,714
---------- -----------
Change in unrealized appreciation (depreciation) on:
Investments (unaffiliated)........................................................ 1,037,009 4,674,460
Forward contracts................................................................. -- 124,202
Change in unrealized foreign exchange gain (loss) on other assets and liabilities... -- 12,845
---------- -----------
Net unrealized gain (loss) on investments and foreign currencies.................... 1,037,009 4,811,507
---------- -----------
Net realized and unrealized gain (loss) on investments and foreign currencies....... 365,635 7,594,221
---------- -----------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS..................... $1,120,927 $12,972,828
========== ===========
* Net of foreign withholding taxes on interest and dividends of..................... $ -- $ 672
========== ===========
AIG Flexible Credit
Fund
-------------------
INVESTMENT INCOME:
Dividends (unaffiliated).......................................................... $ 40,309
Interest (unaffiliated)........................................................... 10,897,125
-----------
Total investment income*......................................................... 10,937,434
-----------
EXPENSES:
Investment advisory and management fees............................................. 1,399,886
Distribution and Service maintenance fees:
Class A........................................................................... 256,021
Class B........................................................................... --
Class C........................................................................... 374,082
Service fee -- Class W.............................................................. 117,932
Transfer agent fees:
Class A........................................................................... 170,000
Class B........................................................................... --
Class C........................................................................... 84,172
Class W........................................................................... 173,882
Registration fees:
Class A........................................................................... 16,287
Class B........................................................................... --
Class C........................................................................... 10,431
Class W........................................................................... 14,091
Custodian and accounting fees....................................................... 46,482
Reports to shareholders............................................................. 30,744
Audit and tax fees.................................................................. 36,051
Legal fees.......................................................................... 16,287
Trustees' fees and expenses......................................................... 7,137
Interest expense.................................................................... 1,030
Other expenses...................................................................... 16,857
-----------
Total expenses before fee waivers, expense reimbursements and expense recoupments. 2,771,372
Net (fees waived and expenses reimbursed)/recouped by investment advisor (Note 3). --
-----------
Net expenses...................................................................... 2,771,372
-----------
Net investment income (loss)........................................................ 8,166,062
-----------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS AND FOREIGN CURRENCIES:
Net realized gain (loss) on:
Investments (unaffiliated)........................................................ 934,243
Forward contracts................................................................. --
Net realized foreign exchange gain (loss) on other assets and liabilities........... --
-----------
Net realized gain (loss) on investments and foreign currencies...................... 934,243
-----------
Change in unrealized appreciation (depreciation) on:
Investments (unaffiliated)........................................................ 174,828
Forward contracts................................................................. --
Change in unrealized foreign exchange gain (loss) on other assets and liabilities... 735
-----------
Net unrealized gain (loss) on investments and foreign currencies.................... 175,563
-----------
Net realized and unrealized gain (loss) on investments and foreign currencies....... 1,109,806
-----------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS..................... $ 9,275,868
===========
* Net of foreign withholding taxes on interest and dividends of..................... $ --
===========
See Notes to Financial Statements
8
SunAmerica Income Funds
STATEMENT OF CHANGES IN NET ASSETS
AIG U.S. Government AIG Strategic Bond
Securities Fund Fund
-------------------------- --------------------------
For the For the
six months six months
ended For the Year ended For the Year
September ended September ended
30, 2017 March 31, 30, 2017 March 31,
(unaudited) 2017 (unaudited) 2017
------------ ------------ ------------ ------------
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS:
Net investment income (loss)....................................... $ 755,292 $ 1,544,525 $ 5,378,607 $ 10,313,149
Net realized gain (loss) on investments and foreign currencies..... (671,374) (3,707,604) 2,782,714 (1,494,836)
Net unrealized gain (loss) on investments and foreign currencies... 1,037,009 (4,357,250) 4,811,507 16,386,601
------------ ------------ ------------ ------------
Net increase (decrease) in net assets resulting from operations...... 1,120,927 (6,520,329) 12,972,828 25,204,914
------------ ------------ ------------ ------------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income (Class A).................................... (1,333,788) (2,798,856) (2,948,524) (5,554,446)
Net investment income (Class B).................................... -- -- (406,579) (785,283)
Net investment income (Class C).................................... (102,593) (290,749) (1,652,843) (3,770,924)
Net investment income (Class W).................................... -- -- (866,916) (1,129,107)
Net realized gain on securities (Class A).......................... -- -- -- --
Net realized gain on securities (Class B).......................... -- -- --
Net realized gain on securities (Class C).......................... -- -- --
Net realized gain on securities (Class W).......................... -- -- --
------------ ------------ ------------ ------------
Total distributions to shareholders.................................. (1,436,381) (3,089,605) (5,874,862) (11,239,760)
------------ ------------ ------------ ------------
Net increase (decrease) in net assets resulting from capital share
transactions (Note 6)............................................... (8,658,073) (10,548,448) 305,914 (39,982,323)
------------ ------------ ------------ ------------
Total Increase (decrease) in net assets.............................. (8,973,527) (20,158,382) 7,403,880 (26,017,169)
NET ASSETS:
Beginning of period.................................................. 167,974,743 188,133,125 361,669,176 387,686,345
------------ ------------ ------------ ------------
End of period+....................................................... $159,001,216 $167,974,743 $369,073,056 $361,669,176
============ ============ ============ ============
+ Includes accumulated undistributed net investment income (loss) of. $ (633,311) $ 47,778 $ (1,753,139) $ (1,256,884)
============ ============ ============ ============
AIG Flexible Credit
Fund
--------------------------
For the
six months
ended For the Year
September ended
30, 2017 March 31,
(unaudited) 2017
------------ ------------
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS:
Net investment income (loss)....................................... $ 8,166,062 $ 13,687,344
Net realized gain (loss) on investments and foreign currencies..... 934,243 2,673,462
Net unrealized gain (loss) on investments and foreign currencies... 175,563 10,941,400
------------ ------------
Net increase (decrease) in net assets resulting from operations...... 9,275,868 27,302,206
------------ ------------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income (Class A).................................... (3,304,848) (5,974,085)
Net investment income (Class B).................................... -- --
Net investment income (Class C).................................... (1,424,361) (2,514,450)
Net investment income (Class W).................................... (3,667,627) (5,460,071)
Net realized gain on securities (Class A).......................... -- --
Net realized gain on securities (Class B).......................... -- --
Net realized gain on securities (Class C).......................... -- --
Net realized gain on securities (Class W).......................... -- --
------------ ------------
Total distributions to shareholders.................................. (8,396,836) (13,948,606)
------------ ------------
Net increase (decrease) in net assets resulting from capital share
transactions (Note 6)............................................... (9,515,754) 85,037,339
------------ ------------
Total Increase (decrease) in net assets.............................. (8,636,722) 98,390,939
NET ASSETS:
Beginning of period.................................................. 376,498,156 278,107,217
------------ ------------
End of period+....................................................... $367,861,434 $376,498,156
============ ============
+ Includes accumulated undistributed net investment income (loss) of. $ 19,075 $ 249,849
============ ============
See Notes to Financial Statements
9
SunAmerica Income Funds
FINANCIAL HIGHLIGHTS
AIG U.S. GOVERNMENT SECURITIES FUND
-----------------------------------
Net gain
(loss) on
Net investments Distributions Net Net
Asset (both Dividends from net Asset Assets, Ratio of
Value, Net realized Total from from net realized Total Value, end of expenses
beginning investment and investment investment gains on Distri- end of Total period to average
Period Ended of period income(1) unrealized) operations income investments butions period Return(2) (000's) net assets(3)
------------ --------- ---------- ----------- ---------- ---------- ------------- ------- ------ --------- -------- -------------
Class A
-------
03/31/13 $10.06 $0.14 $ 0.05 $ 0.19 $(0.21) $(0.13) $(0.34) $9.91 1.84% $121,807 0.99%
03/31/14 9.91 0.14 (0.45) (0.31) (0.17) -- (0.17) 9.43 (3.11) 106,747 0.99
03/31/15 9.43 0.12 0.34 0.46 (0.16) -- (0.16) 9.73 4.94 187,417 0.99
03/31/16 9.73 0.08 (0.05) 0.03 (0.17) -- (0.17) 9.59 0.33 156,468 0.99
03/31/17 9.59 0.09 (0.37) (0.28) (0.16) -- (0.16) 9.15 (2.93) 148,382 0.99
09/30/17# 9.15 0.05 0.01 0.06 (0.08) -- (0.08) 9.13 0.69 142,741 0.99(4)
Class C
-------
03/31/13 $10.05 $0.08 $ 0.05 $ 0.13 $(0.14) $(0.13) $(0.27) $9.91 1.28% $ 12,226 1.64%
03/31/14 9.91 0.08 (0.46) (0.38) (0.11) -- (0.11) 9.42 (3.84) 7,295 1.64
03/31/15 9.42 0.06 0.34 0.40 (0.10) -- (0.10) 9.72 4.27 23,999 1.64
03/31/16 9.72 0.01 (0.03) (0.02) (0.11) -- (0.11) 9.59 (0.22) 31,665 1.64
03/31/17 9.59 0.02 (0.37) (0.35) (0.10) -- (0.10) 9.14 (3.66) 19,592 1.64
09/30/17# 9.14 0.02 0.01 0.03 (0.05) -- (0.05) 9.12 0.36 16,260 1.64(4)
Ratio
of net
investment
income to
average Portfolio
net assets(3) Turnover
------------- ---------
1.40% 89%
1.42 122
1.24 57
0.81 36
0.91 95
0.98(4) 17
0.76% 89%
0.77 122
0.61 57
0.16 36
0.26 95
0.34(4) 17
--------
# Unaudited
(1)Calculated based upon average shares outstanding.
(2)Total return is not annualized and does not reflect sales load, but does
include expense reimbursements.
(3)Net of the following expense reimbursements, if applicable (based on average
net assets):
03/31/13 03/31/14 03/31/15 03/31/16 03/31/17 09/30/17#(4)
-------- -------- -------- -------- -------- ------------
AIG U.S. Government Securities Fund Class A 0.40% 0.40% 0.38% 0.37% 0.35% 0.37%
AIG U.S. Government Securities Fund
Class C................................... 0.45 0.57 0.50 0.39 0.40 0.52
(4)Annualized
See Notes to Financial Statements
10
SunAmerica Income Funds
FINANCIAL HIGHLIGHTS -- (continued)
AIG STRATEGIC BOND FUND
-----------------------
Net gain
(loss) on
Net investments Distributions Net Net
Asset (both Dividends from net Asset Assets,
Value, Net realized Total from from net realized Total Value, end of
beginning investment and investment investment gains on Distri- end of Total period
Period Ended of period income(1) unrealized) operations income investments butions period Return(2) (000's)
-------------------- --------- ---------- ----------- ---------- ---------- ------------- ------- ------ --------- --------
Class A
-------
03/31/13 $3.45 $0.13 $ 0.16 $ 0.29 $(0.14) $-- $(0.14) $3.60 8.64% $336,759
03/31/14 3.60 0.14 (0.06) 0.08 (0.15) -- (0.15) 3.53 2.34 255,821
03/31/15 3.53 0.13 (0.04) 0.09 (0.13) -- (0.13) 3.49 2.70 235,093
03/31/16 3.49 0.12 (0.20) (0.08) (0.14) -- (0.14) 3.27 (2.32) 175,386
03/31/17 3.27 0.10 0.14 0.24 (0.11) -- (0.11) 3.40 7.38 163,163
09/30/17# 3.40 0.05 0.07 0.12 (0.06) -- (0.06) 3.46 3.54 175,080
Class B
-------
03/31/13 $3.45 $0.11 $ 0.15 $ 0.26 $(0.12) $-- $(0.12) $3.59 7.62% $ 56,776
03/31/14 3.59 0.12 (0.05) 0.07 (0.13) -- (0.13) 3.53 1.95 46,462
03/31/15 3.53 0.10 (0.03) 0.07 (0.11) -- (0.11) 3.49 2.01 39,733
03/31/16 3.49 0.10 (0.20) (0.10) (0.12) -- (0.12) 3.27 (2.97) 31,038
03/31/17 3.27 0.08 0.14 0.22 (0.09) -- (0.09) 3.40 6.66 29,762
09/30/17# 3.40 0.04 0.07 0.11 (0.05) -- (0.05) 3.46 3.19 28,427
Class C
-------
03/31/13 $3.47 $0.11 $ 0.15 $ 0.26 $(0.12) $-- $(0.12) $3.61 7.62% $270,965
03/31/14 3.61 0.12 (0.06) 0.06 (0.13) -- (0.13) 3.54 1.69 197,904
03/31/15 3.54 0.11 (0.04) 0.07 (0.11) -- (0.11) 3.50 2.05 184,282
03/31/16 3.50 0.10 (0.19) (0.09) (0.12) -- (0.12) 3.29 (2.63) 151,197
03/31/17 3.29 0.08 0.13 0.21 (0.09) -- (0.09) 3.41 6.35 128,332
09/30/17# 3.41 0.04 0.08 0.12 (0.05) -- (0.05) 3.48 3.49 109,684
Class W
-------
01/29/15(4)-03/31/15 $3.48 $0.01 $ 0.02 $ 0.03 $(0.02) $-- $(0.02) $3.49 0.99% $ 15,664
03/31/16 3.49 0.12 (0.20) (0.08) (0.14) -- (0.14) 3.27 (2.14) 30,065
03/31/17 3.27 0.11 0.13 0.24 (0.12) -- (0.12) 3.39 7.26 40,412
09/30/17# 3.39 0.06 0.07 0.13 (0.06) -- (0.06) 3.46 3.94 55,883
Ratio
of net
Ratio of investment
expenses income to
to average average Portfolio
net assets net assets Turnover
---------- ---------- ---------
1.30% 3.70% 166%
1.31 4.01 158
1.30 3.62 137
1.34 3.54 108
1.32 3.00 109
1.33(5) 3.18(5) 70
1.97% 3.02% 166%
1.97 3.35 158
1.97 2.95 137
2.01 2.87 108
1.99 2.33 109
2.01(5) 2.51(5) 70
1.94% 3.05% 166%
1.96 3.37 158
1.94 2.98 137
1.98 2.90 108
1.97 2.35 109
1.98(5) 2.54(5) 70
1.20%(3)(5) 2.73%(3)(5) 137%
1.15 3.71 108
1.14 3.20 109
1.15(5) 3.35(5) 70
--------
# Unaudited
(1)Calculated based upon average shares outstanding.
(2)Total return is not annualized and does not reflect sales load, but does
include expense reimbursements.
(3)Net of the following expense reimbursements, if applicable (based on average
net assets):
03/31/15
--------
AIG Strategic Bond Fund Class W......... 0.69%(5)
(4)Inception date of class.
(5)Annualized.
See Notes to Financial Statements
11
SunAmerica Income Funds
FINANCIAL HIGHLIGHTS -- (continued)
AIG FLEXIBLE CREDIT FUND
------------------------
Net gain
(loss) on
Net investments Distributions Net
Asset (both Dividends from net Asset Net Assets,
Value, Net realized Total from from net realized Total Value, end of
beginning investment and investment investment gains on Distri- end of Total period
Period Ended of period income(1) unrealized) operations income investment butions period Return(2) (000's)
-------------------- --------- ---------- ----------- ---------- ---------- ------------- ------- ------ --------- -----------
Class A
-------
03/31/13 $3.40 $0.20 $ 0.18 $ 0.38 $(0.20) $-- $(0.20) $3.58 11.42% $ 74,175
03/31/14 3.58 0.19 0.00 0.19 (0.18) -- (0.18) 3.59 5.60 70,713
03/31/15 3.59 0.15 (0.11) 0.04 (0.17) -- (0.17) 3.46 1.06 127,508
03/31/16 3.46 0.13 (0.16) (0.03) (0.14) -- (0.14) 3.29 (0.93) 125,775
03/31/17 3.29 0.14 0.16 0.30 (0.15) -- (0.15) 3.44 9.11 144,880
09/30/17# 3.44 0.07 0.02 0.09 (0.08) -- (0.08) 3.45 2.54 147,089
Class C
-------
03/31/13 $3.42 $0.18 $ 0.18 $ 0.36 $(0.18) $-- $(0.18) $3.60 10.67% $ 33,918
03/31/14 3.60 0.17 0.00 0.17 (0.16) -- (0.16) 3.61 4.92 30,595
03/31/15 3.61 0.13 (0.11) 0.02 (0.15) -- (0.15) 3.48 0.43 45,411
03/31/16 3.48 0.11 (0.16) (0.05) (0.12) -- (0.12) 3.31 (1.54) 61,891
03/31/17 3.31 0.12 0.15 0.27 (0.12) -- (0.12) 3.46 8.38 74,241
09/30/17# 3.46 0.06 0.02 0.08 (0.07) -- (0.07) 3.47 2.21 72,935
Class W
-------
10/01/14(4)-03/31/15 $3.50 $0.06 $(0.01) $ 0.05 $(0.08) $-- $(0.08) $3.47 1.57% $ 13,632
03/31/16 3.47 0.13 (0.17) (0.04) (0.14) -- (0.14) 3.29 (1.02) 90,441
03/31/17 3.29 0.15 0.15 0.30 (0.15) -- (0.15) 3.44 9.34 157,377
09/30/17# 3.44 0.08 0.01 0.09 (0.08) -- (0.08) 3.45 2.65 147,838
Ratio
of net
Ratio of investment
expenses income to
to average average Portfolio
net assets net assets Turnover
---------- ---------- ---------
1.36%(3) 5.82%(3) 44%
1.36(3) 5.41(3) 49
1.41(3) 4.50(3) 74
1.45(3) 3.92(3) 52
1.43 4.21 69
1.41(5) 4.34(5) 33
2.01%(3) 5.18%(3) 44%
2.01(3) 4.76(3) 49
2.06(3) 3.88(3) 74
2.10(3) 3.27(3) 52
2.07 3.57 69
2.07(5) 3.68(5) 33
1.25%(3)(5) 4.25%(3)(5) 74%
1.25(3) 4.11(3) 52
1.21 4.44 69
1.21(5) 4.54(5) 33
--------
# Unaudited
(1)Calculated based upon average shares outstanding.
(2)Total return is not annualized and does not reflect sales load, but does
include expense reimbursements.
(3)Net of the following expense reimbursements, if applicable (based on average
net assets):
03/31/13 03/31/14 03/31/15 03/31/16
-------- -------- -------- --------
AIG Flexible Credit Fund Class A........ 0.16% 0.17% 0.19% 0.03%
AIG Flexible Credit Fund Class C........ 0.16 0.18 0.20 0.02
AIG Flexible Credit Fund Class W........ -- -- 1.12(5) 0.04
(4)Inception date of class.
(5)Annualized.
See Notes to Financial Statements
12
AIG U.S. Government Securities Fund
PORTFOLIO PROFILE -- September 30, 2017 -- (unaudited)
Industry Allocation*
Government National Mtg. Assoc.. 31.1%
United States Treasury Notes.... 22.9
Federal Home Loan Bank.......... 15.8
United States Treasury Bonds.... 10.3
Federal Home Loan Mtg. Corp..... 7.3
Federal Farm Credit Bank........ 5.9
Federal National Mtg. Assoc..... 5.4
Repurchase Agreements........... 1.1
----
99.8%
====
Credit Quality+#
Aaa........ 98.8%
Not Rated@. 1.2
-----
100.0%
=====
--------
*Calculated as a percentage of net assets.
+Source: Moody's
#Calculated as a percentage of total debt issues.
@Represents debt issues that either have no rating, or the rating is
unavailable from the data source.
13
AIG U.S. Government Securities Fund
PORTFOLIO OF INVESTMENTS -- September 30, 2017 -- (unaudited)
Principal Value
Security Description Amount (Note 2)
U.S. GOVERNMENT AGENCIES -- 65.5%
Federal Farm Credit Bank -- 5.9%
Federal Farm Credit Bank FRS
1.40% (1 ML+0.16%)
due 03/26/2018........................ $ 9,435,000 $ 9,448,341
-----------
Federal Home Loan Bank -- 15.8%
1.25% due 08/15/2019(1)............... 2,250,000 2,245,840
1.38% due 03/09/2018.................. 5,460,000 5,464,767
1.69% due 02/26/2021.................. 480,000 473,522
2.14% due 12/05/2022.................. 372,093 368,617
4.50% due 09/13/2019.................. 1,490,000 1,573,316
Federal Home Loan Bank FRS
1.26% (1 ML+0.03%)
due 05/17/2018........................ 15,000,000 15,014,522
-----------
25,140,584
-----------
Federal Home Loan Mtg. Corp. -- 7.3%
3.50% due 08/01/2030.................. 3,190,260 3,339,308
3.50% due 12/01/2044.................. 4,445,567 4,607,811
4.00% due 04/01/2034.................. 1,666,784 1,772,063
Federal Home Loan Mtg. Corp. REMIC
Series 3747, Class WA
3.50% due 10/15/2030(2)............... 1,801,711 1,868,912
-----------
11,588,094
-----------
Federal National Mtg. Assoc. -- 5.4%
1.00% due 03/28/2018.................. 5,000,000 4,992,795
2.50% due 11/01/2027.................. 3,459,995 3,506,597
-----------
8,499,392
-----------
Government National Mtg. Assoc. -- 31.1%
3.50% due 03/15/2042.................. 340,187 354,992
3.50% due 06/15/2042.................. 1,748,089 1,823,825
3.50% due 07/15/2042.................. 552,596 575,579
3.50% due 02/20/2045.................. 1,002,636 1,043,929
4.00% due 03/15/2039.................. 181,767 191,772
4.00% due 04/15/2039.................. 121,824 128,814
4.00% due 06/15/2039.................. 493,178 520,326
4.00% due 12/15/2039.................. 261,092 275,464
4.00% due 08/15/2040.................. 212,324 224,956
4.00% due 09/15/2040.................. 214,864 227,647
4.00% due 11/15/2040.................. 384,749 407,699
4.00% due 12/15/2040.................. 701,339 741,857
4.00% due 02/15/2041.................. 273,842 290,182
4.00% due 03/15/2041.................. 188,812 200,030
4.00% due 07/15/2041.................. 368,318 389,772
4.00% due 08/15/2041.................. 520,401 550,760
4.00% due 09/15/2041.................. 1,396,846 1,477,906
4.00% due 10/15/2041.................. 570,222 603,499
4.00% due 11/15/2041.................. 1,799,933 1,906,089
4.00% due 12/15/2041.................. 885,138 936,498
4.00% due 01/15/2042.................. 1,866,000 1,974,975
4.00% due 02/15/2042.................. 706,262 747,786
4.00% due 03/15/2042.................. 214,302 226,257
4.00% due 06/15/2042.................. 215,153 227,861
4.50% due 05/15/2018.................. 19,073 19,239
4.50% due 08/15/2018.................. 24,708 24,956
4.50% due 09/15/2018.................. 105,555 106,782
4.50% due 10/15/2018.................. 143,431 145,291
4.50% due 09/15/2033.................. 324,575 348,834
4.50% due 03/15/2039.................. 88,849 95,098
Principal Value
Security Description Amount (Note 2)
Government National Mtg. Assoc. (continued)
4.50% due 04/15/2039.. $ 68,397 $ 73,336
4.50% due 05/15/2039.. 337,336 361,817
4.50% due 06/15/2039.. 1,373,373 1,473,523
4.50% due 07/15/2039.. 632,678 678,280
4.50% due 09/15/2039.. 180,395 193,433
4.50% due 11/15/2039.. 196,429 210,696
4.50% due 12/15/2039.. 526,530 565,283
4.50% due 01/15/2040.. 248,064 265,957
4.50% due 02/15/2040.. 1,074,077 1,153,849
4.50% due 03/15/2040.. 659,509 707,392
4.50% due 04/15/2040.. 678,413 729,275
4.50% due 05/15/2040.. 266,441 287,140
4.50% due 06/15/2040.. 272,680 293,438
4.50% due 07/15/2040.. 458,929 491,717
4.50% due 08/15/2040.. 143,751 154,380
4.50% due 09/15/2040.. 173,776 187,648
4.50% due 11/15/2040.. 194,338 208,994
4.50% due 01/15/2041.. 167,369 179,747
4.50% due 02/15/2041.. 197,456 211,344
4.50% due 03/15/2041.. 1,312,383 1,412,190
4.50% due 04/15/2041.. 579,581 622,148
4.50% due 05/15/2041.. 203,881 219,408
4.50% due 06/15/2041.. 395,986 426,935
4.50% due 07/15/2041.. 161,190 172,527
4.50% due 08/15/2041.. 395,525 425,449
4.50% due 04/20/2044.. 742,644 792,815
5.00% due 04/15/2018.. 78,009 78,888
5.00% due 05/15/2018.. 2,590 2,618
5.00% due 08/15/2033.. 390,968 429,894
5.00% due 10/15/2033.. 666,592 733,085
5.00% due 05/15/2035.. 127,142 138,872
5.00% due 08/15/2035.. 357,193 393,183
5.00% due 03/15/2036.. 169,815 185,782
5.00% due 05/15/2036.. 88,423 97,347
5.00% due 09/15/2036.. 220,302 241,758
5.00% due 01/15/2037.. 162,283 177,366
5.00% due 02/15/2037.. 286,655 313,096
5.00% due 03/15/2037.. 47,497 52,250
5.00% due 04/15/2037.. 339,725 371,160
5.00% due 04/15/2038.. 440,496 481,901
5.00% due 05/15/2038.. 220,745 243,044
5.00% due 08/15/2038.. 563,896 617,685
5.00% due 01/15/2039.. 206,989 227,821
5.00% due 02/15/2039.. 105,675 116,028
5.00% due 03/15/2039.. 113,515 125,091
5.00% due 04/15/2039.. 115,738 126,503
5.00% due 07/20/2039.. 1,017,461 1,116,015
5.00% due 08/15/2039.. 299,847 330,056
5.00% due 09/20/2039.. 3,319,128 3,627,323
5.00% due 10/15/2039.. 664,700 730,205
5.00% due 11/15/2039.. 573,113 629,213
5.00% due 12/15/2039.. 497,655 547,696
5.00% due 04/15/2040.. 502,677 551,077
5.00% due 05/15/2040.. 1,001,279 1,099,711
5.00% due 07/20/2045.. 448,536 481,107
5.50% due 06/15/2033.. 666,971 750,630
5.50% due 07/15/2033.. 106,324 119,840
5.50% due 10/15/2033.. 165,121 186,164
5.50% due 01/15/2034.. 483,357 544,674
14
AIG U.S. Government Securities Fund
PORTFOLIO OF INVESTMENTS -- September 30, 2017 -- (unaudited)
(continued)
Principal Value
Security Description Amount (Note 2)
U.S. GOVERNMENT AGENCIES (continued)
Government National Mtg. Assoc. (continued)
5.50% due 02/15/2034............... $ 252,070 $ 282,627
5.50% due 04/20/2035............... 461,160 512,663
5.50% due 09/15/2035............... 400,358 461,078
5.50% due 10/15/2035............... 325,740 367,397
5.50% due 02/15/2038............... 148,293 166,787
5.50% due 04/15/2038............... 83,888 93,461
5.50% due 05/15/2038............... 99,787 111,174
5.50% due 09/15/2039............... 75,940 84,766
5.50% due 03/15/2040............... 136,447 153,533
5.50% due 08/15/2040............... 67,243 75,867
6.00% due 04/15/2028............... 153,191 174,298
6.00% due 08/15/2033............... 254,855 289,958
6.00% due 12/15/2033............... 90,892 102,821
6.00% due 07/15/2034............... 55,686 62,766
6.00% due 12/15/2034............... 38,374 43,253
6.00% due 09/20/2038............... 1,056,919 1,185,508
6.50% due 10/15/2031............... 71,162 78,652
------------
49,401,088
------------
Total U.S. Government Agencies
(cost $103,422,896)................ 104,077,499
------------
U.S. GOVERNMENT TREASURIES -- 33.2%
United States Treasury Bonds -- 10.3%
2.50% due 02/15/2045............... 1,000,000 932,656
4.25% due 11/15/2040............... 8,000,000 10,038,125
4.75% due 02/15/2041............... 4,000,000 5,373,594
------------
16,344,375
------------
Principal Value
Security Description Amount (Note 2)
United States Treasury Notes -- 22.9%
1.38% due 05/31/2021........................ $ 28,000,000 $ 27,621,563
2.00% due 02/15/2025........................ 5,000,000 4,931,641
2.00% due 08/15/2025........................ 3,000,000 2,948,672
3.13% due 05/15/2019........................ 1,000,000 1,027,031
------------
36,528,907
------------
Total U.S. Government Treasuries
(cost $48,992,663).......................... 52,873,282
------------
Total Long-Term Investment Securities
(cost $152,415,559)......................... 156,950,781
------------
REPURCHASE AGREEMENTS -- 1.1%
Agreement with Fixed Income Clearing
Corp., bearing interest at 0.12%, dated
09/29/2017, to be repurchased
10/02/2017 in the amount $1,718,017
and collateralized by $1,730,000 of United
States Treasury Notes, bearing interest at
2.38% due 05/15/2027 and having an
approximate value of $1,755,158
(cost $1,718,000)........................... 1,718,000 1,718,000
------------
TOTAL INVESTMENTS
(cost $154,133,559)(3)...................... 99.8% 158,668,781
Other assets less liabilities.................. 0.2 332,435
------------ ------------
NET ASSETS 100.0% $159,001,216
============ ============
--------
(1)"Step-up" security where the rate increases ("steps-up") at a predetermined
rate. The rate reflected is as of September 30, 2017.
(2)Collateralized Mortgage Obligation
(3)See Note 5 for cost of investments on a tax basis.
REMIC --Real Estate Mortgage Investment Conduit
FRS --Floating Rate Security
The rates shown on FRS are the current interest rates at September 30, 2017 and
unless noted otherwise, the dates shown are the original maturity dates
Index Legend
1ML --1 Month USD LIBOR
The following is a summary of the inputs used to value the Fund's net assets as
of September 30, 2017 (see Note 2):
Level 1 -- Unadjusted Level 2 -- Other Level 3 -- Significant
Quoted Prices Observable Inputs Unobservable Inputs Total
--------------------- ----------------- ---------------------- ------------
ASSETS:
Investments at Value:*
U.S. Government Agencies...... $-- $104,077,499 $-- $104,077,499
U.S. Government Treasuries.... -- 52,873,282 -- 52,873,282
Repurchase Agreements......... -- 1,718,000 -- 1,718,000
--- ------------ --- ------------
Total Investments at Value.... $-- $158,668,781 $-- $158,668,781
=== ============ === ============
--------
* For a detailed presentation of investments, please refer to the Portfolio of
Investments.
The Fund's policy is to recognize transfers between Levels as of the end of the
reporting period. There were no transfers between Levels during the reporting
period.
See Notes to Financial Statements
15
AIG Strategic Bond Fund
PORTFOLIO PROFILE -- September 30, 2017 -- (unaudited)
Industry Allocation*
Sovereign.............................. 14.9%
Diversified Financial Services......... 6.3
Federal National Mtg. Assoc............ 5.2
United States Treasury Notes........... 5.2
Diversified Banking Institutions....... 4.5
Banks-Commercial....................... 3.6
Federal Home Loan Mtg. Corp............ 3.1
Pipelines.............................. 3.0
Oil Companies-Exploration & Production. 2.9
Cable/Satellite TV..................... 2.6
Oil Companies-Integrated............... 1.8
Real Estate Investment Trusts.......... 1.7
Cellular Telecom....................... 1.5
Electric-Integrated.................... 1.4
United States Treasury Bonds........... 1.4
Telephone-Integrated................... 1.1
Computers.............................. 0.9
Medical-Hospitals...................... 0.9
Auto-Cars/Light Trucks................. 0.8
Satellite Telecom...................... 0.8
Oil Refining & Marketing............... 0.8
Chemicals-Diversified.................. 0.8
Medical-Drugs.......................... 0.8
Repurchase Agreements.................. 0.7
Computer Services...................... 0.7
Paper & Related Products............... 0.7
Finance-Consumer Loans................. 0.7
Oil-Field Services..................... 0.6
Finance-Auto Loans..................... 0.6
Enterprise Software/Service............ 0.6
Gambling (Non-Hotel)................... 0.6
Insurance-Multi-line................... 0.6
Time Deposits.......................... 0.5
Real Estate Management/Services........ 0.5
Aerospace/Defense-Equipment............ 0.5
Metal-Copper........................... 0.5
Savings & Loans/Thrifts................ 0.5
Banks-Super Regional................... 0.5
Energy-Alternate Sources............... 0.5
Retail-Restaurants..................... 0.5
Transport-Rail......................... 0.4
Metal Processors & Fabrication......... 0.4
Investment Management/Advisor Services. 0.4
Printing-Commercial.................... 0.4
Internet Connectivity Services......... 0.4
Banks-Special Purpose.................. 0.4
Containers-Metal/Glass................. 0.4
Auto-Heavy Duty Trucks................. 0.4
Building-Residential/Commercial........ 0.4
Finance-Credit Card.................... 0.4
Rental Auto/Equipment.................. 0.4
Airlines............................... 0.4
Publishing-Books....................... 0.4
Electric-Generation.................... 0.3
Auto/Truck Parts & Equipment-Original.. 0.3
Building Products-Wood................. 0.3
Central Bank........................... 0.3
Cruise Lines........................... 0.3
Steel-Producers........................ 0.3
Retail-Office Supplies................. 0.3
Brewery................................ 0.3
Electric-Distribution.................. 0.3%
Medical Products....................... 0.3
Banks-Export/Import.................... 0.3
Building & Construction-Misc........... 0.3
Diversified Manufacturing Operations... 0.3
Food-Retail............................ 0.3
Telecom Services....................... 0.3
E-Commerce/Services.................... 0.3
Finance-Investment Banker/Broker....... 0.3
Building-Heavy Construction............ 0.3
Wireless Equipment..................... 0.3
Marine Services........................ 0.3
Batteries/Battery Systems.............. 0.3
Internet Content-Entertainment......... 0.3
Gas-Distribution....................... 0.3
Television............................. 0.2
Computers-Memory Devices............... 0.2
Broadcast Services/Program............. 0.2
Independent Power Producers............ 0.2
Machinery-Construction & Mining........ 0.2
Finance-Mortgage Loan/Banker........... 0.2
Diversified Minerals................... 0.2
Finance-Other Services................. 0.2
Radio.................................. 0.2
Retail-Appliances...................... 0.2
Food-Dairy Products.................... 0.2
Coal................................... 0.2
Agricultural Chemicals................. 0.2
SupraNational Banks.................... 0.2
Building & Construction Products-Misc.. 0.2
Auction Houses/Art Dealers............. 0.2
Containers-Paper/Plastic............... 0.2
Precious Metals........................ 0.2
Resorts/Theme Parks.................... 0.2
Casino Hotels.......................... 0.2
Banks-Fiduciary........................ 0.2
Cosmetics & Toiletries................. 0.2
Distribution/Wholesale................. 0.2
Poultry................................ 0.2
Insurance-Mutual....................... 0.2
Circuit Boards......................... 0.2
Retail-Automobile...................... 0.2
Travel Services........................ 0.2
Electronic Parts Distribution.......... 0.2
Hotels/Motels.......................... 0.2
Data Processing/Management............. 0.2
Oil Field Machinery & Equipment........ 0.2
Medical-HMO............................ 0.2
Transport-Services..................... 0.2
Metal-Iron............................. 0.2
Retail-Major Department Stores......... 0.2
Platinum............................... 0.2
Hazardous Waste Disposal............... 0.2
Medical-Generic Drugs.................. 0.2
Food-Misc./Diversified................. 0.2
Insurance-Life/Health.................. 0.1
Metal-Diversified...................... 0.1
Semiconductor Equipment................ 0.1
Racetracks............................. 0.1
Medical-Biomedical/Gene................ 0.1
Wire & Cable Products.................. 0.1
16
AIG Strategic Bond Fund
PORTFOLIO PROFILE -- September 30, 2017 -- (unaudited) (continued)
Industry Allocation* (continued)
Commercial Services.................. 0.1%
Gold Mining.......................... 0.1
Water................................ 0.1
Retail-Misc./Diversified............. 0.1
Electric Products-Misc............... 0.1
Building Societies................... 0.1
Retail-Drug Store.................... 0.1
Food-Wholesale/Distribution.......... 0.1
Coatings/Paint....................... 0.1
Electronic Components-Semiconductors. 0.1
Telecommunication Equipment.......... 0.1
Diversified Operations............... 0.1
Networking Products.................. 0.1
Petrochemicals....................... 0.1
E-Commerce/Products.................. 0.1
Investment Companies................. 0.1
Airport Development/Maintenance...... 0.1
Oil & Gas Drilling................... 0.1
Tools-Hand Held...................... 0.1
Non-Hazardous Waste Disposal......... 0.1
Food-Meat Products................... 0.1
Appliances........................... 0.1
Transport-Marine..................... 0.1
Beverages-Non-alcoholic.............. 0.1
Finance-Leasing Companies............ 0.1
Beverages-Wine/Spirits............... 0.1
Retail-Discount...................... 0.1
Multimedia........................... 0.1
Tennessee Valley Authority........... 0.1
Power Converter/Supply Equipment..... 0.1
Pharmacy Services.................... 0.1
Gas-Transportation................... 0.1
Transport-Equipment & Leasing........ 0.1
----
99.8%
====
Credit Quality+#
Aaa........ 18.2%
Aa......... 1.9
A.......... 9.2
Baa........ 16.8
Ba......... 17.9
B.......... 21.0
Caa........ 5.1
Ca......... 0.1
Not Rated@. 9.8
-----
100.0%
=====
--------
*Calculated as a percentage of net assets.
+Source: Moody's
#Calculated as a percentage of total debt issues, excluding short-term
securities.
@Represents debt issues that either have no rating or the rating is unavailable
from the data source.
17
AIG Strategic Bond Fund
PORTFOLIO OF INVESTMENTS -- September 30, 2017 -- (unaudited)
Principal Value
Security Description Amount** (Note 2)
ASSET BACKED SECURITIES -- 6.1%
Diversified Financial Services -- 6.1%
Ally Auto Receivables Trust
Series 2017-4, Class A3
1.75% due 12/15/2021......................... $1,100,000 $1,098,111
American Express Credit Account Master Trust
FRS
Series 2014-1, Class A
1.60% (1 ML+0.37%)
due 12/15/2021............................... 49,000 49,215
American Express Credit Account Master Trust
Series 2017-3, Class A
1.77% due 11/15/2022......................... 1,000,000 996,993
American Express Credit Account Master Trust
Series 2017-1, Class A
1.93% due 09/15/2022......................... 1,000,000 1,001,357
Capital One Multi-Asset Execution Trust
Series 2016-A4, Class A4
1.33% due 06/15/2022......................... 1,000,000 991,832
CarMax Auto Owner Trust
Series 2016-3, Class A4
1.60% due 01/18/2022......................... 150,000 148,328
Chase Issuance Trust
Series 2016-A2, Class A
1.37% due 06/15/2021......................... 200,000 198,691
Chase Issuance Trust
Series 2015-A4, Class A4
1.84% due 04/15/2022......................... 1,500,000 1,498,896
Chase Mtg. Trust VRS
Series 2016-2, Class M2
3.75% due 12/25/2045*(1)(14)................. 396,172 403,217
Citibank Credit Card Issuance Trust
Series 2017-A3, Class A3
1.92% due 04/07/2022......................... 1,081,000 1,081,676
Citibank Credit Card Issuance Trust
Series 2014-A6, Class A6
2.15% due 07/15/2021......................... 1,000,000 1,006,654
Citibank Credit Card Issuance Trust
Series 2014-A1, Class A1
2.88% due 01/23/2023......................... 78,000 80,152
Citigroup Commercial Mtg. Trust
Series 2016-SMPL, Class A
2.23% due 09/10/2031*(2)..................... 163,000 161,586
COMM Mtg. Trust
Series 2016-787S, Class A
3.55% due 02/10/2036*(2)..................... 329,000 338,753
COMM Mtg. Trust VRS
Series 2016-787S, Class B
3.96% due 02/10/2036*(2)(14)................. 132,000 136,797
Discover Card Execution Note Trust
Series 2017-A6, Class A6
1.88% due 02/15/2023......................... 1,000,000 997,864
Discover Card Execution Note Trust
Series 2015-A4, Class A4
2.19% due 04/17/2023......................... 117,000 117,747
Ford Credit Auto Owner Trust
Series 2016-A, ClassA4
1.60% due 06/15/2021......................... 1,000,000 996,946
Principal Value
Security Description Amount** (Note 2)
Diversified Financial Services (continued)
Ford Credit Auto Owner Trust
Series 2014-C,Class B
1.97% due 04/15/2020....................... $ 81,000 $ 81,221
Ford Credit Auto Owner Trust
Series 2015-2, Class A
2.44% due 01/15/2027*...................... 50,000 50,480
GM Financial Automobile Leasing Trust
Series 2016-2, Class A3
1.62% due 09/20/2019....................... 1,000,000 999,659
GS Mtg. Securities Trust
Series 2015-GC28, Class A2
2.90% due 02/10/2048(2).................... 102,000 103,541
Honda Auto Receivables Owner Trust
Series 2016-2, Class A4
1.62% due 08/15/2022....................... 104,000 103,577
Honda Auto Receivables Owner Trust
Series 2017-1, ClassA3
1.72% due 07/21/2021....................... 1,000,000 999,445
Hudson Yards Mtg. Trust
Series 2016-10HY, Class A
2.84% due 08/10/2038*(2)................... 1,000,000 976,182
Hyundai Auto Receivables Trust
Series 2017-B, ClassA3
1.77% due 01/18/2022....................... 1,000,000 998,083
JPMDB Commercial Mtg. Securities Trust
Series 2016-C2, Class A2
2.66% due 06/15/2049(2).................... 990,000 998,726
Morgan Stanley Capital Barclays Bank Trust
Series 2016-MART, Class A
2.20% due 09/13/2031*(2)................... 185,000 183,231
Nissan Auto Receivables Owner Trust
Series 2017-B, ClassA4
1.95% due 10/16/2023....................... 1,600,000 1,595,116
Synchrony Credit Card Master Note Trust
Series 2016-2, Class A
2.21% due 05/15/2024....................... 1,600,000 1,598,903
Toyota Auto Receivables
Series 2016-C, ClassA3
1.14% due 08/17/2020....................... 1,500,000 1,492,647
Verizon Owner Trust
Series 2016-2A, ClassA
1.68% due 05/20/2021*...................... 1,000,000 996,843
-----------
Total Asset Backed Securities
(cost $22,595,666)......................... 22,482,469
-----------
U.S. CORPORATE BONDS & NOTES -- 39.4%
Advertising Agencies -- 0.0%
Interpublic Group of Cos., Inc.
Senior Notes
4.20% due 04/15/2024....................... 133,000 139,712
-----------
Aerospace/Defense-Equipment -- 0.5%
Moog, Inc.
Company Guar. Notes
5.25% due 12/01/2022*...................... 628,000 654,690
Triumph Group, Inc.
Company Guar. Notes
4.88% due 04/01/2021....................... 765,000 753,908
18
AIG Strategic Bond Fund
PORTFOLIO OF INVESTMENTS -- September 30, 2017 -- (unaudited)
(continued)
Principal Value
Security Description Amount** (Note 2)
U.S. CORPORATE BONDS & NOTES (continued)
Aerospace/Defense-Equipment (continued)
United Technologies Corp.
Senior Notes
1.90% due 05/04/2020.............. $152,000 $ 151,509
United Technologies Corp.
Senior Notes
4.05% due 05/04/2047.............. 111,000 112,513
----------
1,672,620
----------
Agricultural Chemicals -- 0.0%
Mosaic Co.
Senior Notes
4.88% due 11/15/2041.............. 64,000 60,282
----------
Airlines -- 0.4%
Atlas Air, Inc.
Pass-Through Certs.
Series 1999-1, Class B
7.63% due 01/02/2018(3)........... 29,221 29,326
Atlas Air, Inc.
Pass-Through Certs.
Series 2000-1, Class B
9.06% due 01/02/2018(3)........... 53,263 53,743
Delta Air Lines, Inc.
Senior Notes
2.88% due 03/13/2020.............. 151,000 152,698
United Airlines Pass-Through Trust
Pass-Through Certs.
Series 2014-2, Class B
4.63% due 03/03/2024.............. 608,363 631,177
United Airlines Pass-Through Trust
Pass-Through Certs.
Series 2013-1, Class B
5.38% due 02/15/2023.............. 398,899 418,843
----------
1,285,787
----------
Appliances -- 0.0%
Whirlpool Corp.
Senior Notes
4.50% due 06/01/2046.............. 104,000 108,559
----------
Applications Software -- 0.0%
Microsoft Corp.
Senior Notes
4.10% due 02/06/2037.............. 117,000 126,795
----------
Auction Houses/Art Dealers -- 0.2%
KAR Auction Services, Inc.
Company Guar. Notes
5.13% due 06/01/2025*............. 725,000 754,000
----------
Auto-Cars/Light Trucks -- 0.5%
American Honda Finance Corp.
Senior Notes
1.20% due 07/12/2019.............. 218,000 216,023
BMW US Capital LLC
Company Guar. Notes
1.50% due 04/11/2019*............. 159,000 158,530
Daimler Finance North America LLC
Company Guar. Notes
2.00% due 07/06/2021*............. 78,000 76,813
Principal Value
Security Description Amount** (Note 2)
Auto-Cars/Light Trucks (continued)
Daimler Finance North America LLC
Company Guar. Notes
2.30% due 01/06/2020*............ $ 162,000 $ 162,672
Daimler Finance North America LLC
Company Guar. Notes
2.45% due 05/18/2020*............ 277,000 278,946
Ford Motor Co.
Senior Notes
5.29% due 12/08/2046............. 126,000 131,469
Ford Motor Credit Co. LLC
Senior Notes
2.02% due 05/03/2019............. 129,000 128,924
General Motors Co.
Senior Notes
5.15% due 04/01/2038............. 91,000 93,301
Nissan Motor Acceptance Corp.
Senior Notes
2.15% due 09/28/2020*............ 142,000 142,065
Nissan Motor Acceptance Corp.
Senior Notes
2.65% due 07/13/2022*............ 252,000 252,643
Toyota Motor Credit Corp.
Senior Notes
1.70% due 01/09/2019............. 336,000 336,078
----------
1,977,464
----------
Auto-Heavy Duty Trucks -- 0.4%
JB Poindexter & Co., Inc.
Senior Notes
9.00% due 04/01/2022*............ 1,325,000 1,384,625
----------
Auto/Truck Parts & Equipment-Original -- 0.0%
Lear Corp.
Senior Notes
3.80% due 09/15/2027............. 78,000 77,704
----------
Banks-Commercial -- 0.7%
BankUnited, Inc.
Senior Notes
4.88% due 11/17/2025............. 366,000 381,235
Fifth Third Bank
Senior Notes
1.63% due 09/27/2019............. 207,000 205,727
First Horizon National Corp.
Senior Notes
3.50% due 12/15/2020............. 460,000 473,614
PNC Bank NA
Senior Notes
2.00% due 05/19/2020............. 250,000 249,832
Regions Financial Corp.
Senior Notes
2.75% due 08/14/2022............. 233,000 232,599
Regions Financial Corp.
Sub. Notes
7.38% due 12/10/2037............. 631,000 850,107
Santander Holdings USA, Inc.
Senior Notes
3.70% due 03/28/2022*............ 210,000 213,957
19
AIG Strategic Bond Fund
PORTFOLIO OF INVESTMENTS -- September 30, 2017 -- (unaudited)
(continued)
Principal Value
Security Description Amount** (Note 2)
U.S. CORPORATE BONDS & NOTES (continued)
Banks-Commercial (continued)
Santander Holdings USA, Inc.
Senior Notes
4.40% due 07/13/2027*................. $107,000 $ 109,406
----------
2,716,477
----------
Banks-Fiduciary -- 0.2%
Bank of New York Mellon Corp.
Senior Notes
2.66% due 05/16/2023.................. 105,000 105,436
Citizens Financial Group, Inc.
Sub. Notes
4.15% due 09/28/2022*................. 575,000 598,922
----------
704,358
----------
Banks-Super Regional -- 0.4%
Capital One Financial Corp.
Sub. Notes
4.20% due 10/29/2025.................. 148,000 152,085
Wells Fargo & Co.
Senior Notes
3.07% due 01/24/2023.................. 805,000 818,791
Wells Fargo & Co.
Sub. Notes
4.40% due 06/14/2046.................. 27,000 28,034
Wells Fargo & Co.
Sub. Notes
4.75% due 12/07/2046.................. 278,000 305,206
Wells Fargo & Co.
Sub. Notes
4.90% due 11/17/2045.................. 35,000 39,041
----------
1,343,157
----------
Batteries/Battery Systems -- 0.3%
EnerSys
Company Guar. Notes
5.00% due 04/30/2023*................. 896,000 931,840
----------
Brewery -- 0.2%
Anheuser-Busch InBev Finance, Inc.
Company Guar. Notes
2.65% due 02/01/2021.................. 337,000 342,473
Anheuser-Busch InBev Finance, Inc.
Company Guar. Notes
3.65% due 02/01/2026.................. 103,000 106,555
Anheuser-Busch InBev Finance, Inc.
Company Guar. Notes
4.70% due 02/01/2036.................. 230,000 253,583
Anheuser-Busch InBev Finance, Inc.
Company Guar. Notes
4.90% due 02/01/2046.................. 129,000 145,714
----------
848,325
----------
Broadcast Services/Program -- 0.2%
Clear Channel Worldwide Holdings, Inc.
Company Guar. Notes
6.50% due 11/15/2022.................. 700,000 721,000
Discovery Communications LLC
Company Guar. Notes
3.95% due 03/20/2028.................. 109,000 108,219
Principal Value
Security Description Amount** (Note 2)
Broadcast Services/Program (continued)
Discovery Communications LLC
Company Guar. Notes
5.00% due 09/20/2037......................... $ 79,000 $ 80,217
----------
909,436
----------
Building & Construction Products-Misc. -- 0.2%
Owens Corning
Company Guar. Notes
4.30% due 07/15/2047......................... 300,000 286,169
Standard Industries, Inc.
Senior Notes
5.00% due 02/15/2027*........................ 479,000 499,357
----------
785,526
----------
Building & Construction-Misc. -- 0.3%
Weekley Homes LLC/Weekley Finance Corp.
Senior Notes
6.00% due 02/01/2023......................... 1,089,000 1,067,220
----------
Building Products-Air & Heating -- 0.0%
Lennox International, Inc.
Company Guar. Notes
3.00% due 11/15/2023......................... 102,000 102,161
----------
Building Products-Wood -- 0.3%
Boise Cascade Co.
Company Guar. Notes
5.63% due 09/01/2024*........................ 855,000 898,818
Masco Corp.
Senior Notes
4.45% due 04/01/2025......................... 252,000 268,985
Masco Corp.
Senior Notes
4.50% due 05/15/2047......................... 110,000 110,302
----------
1,278,105
----------
Building-Heavy Construction -- 0.3%
Tutor Perini Corp.
Company Guar. Notes
6.88% due 05/01/2025*........................ 890,000 965,650
----------
Building-Residential/Commercial -- 0.2%
Lennar Corp.
Company Guar. Notes
4.13% due 01/15/2022......................... 65,000 67,113
Lennar Corp.
Company Guar. Notes
4.50% due 04/30/2024......................... 558,000 574,617
Toll Brothers Finance Corp.
Company Guar. Notes
4.88% due 03/15/2027......................... 80,000 82,608
----------
724,338
----------
Cable/Satellite TV -- 1.2%
Block Communications, Inc.
Senior Notes
6.88% due 02/15/2025*........................ 703,000 762,966
Charter Communications Operating LLC/Charter
Communications Operating Capital
Senior Sec. Notes
3.75% due 02/15/2028*........................ 340,000 332,706
20
AIG Strategic Bond Fund
PORTFOLIO OF INVESTMENTS -- September 30, 2017 -- (unaudited)
(continued)
Principal Value
Security Description Amount** (Note 2)
U.S. CORPORATE BONDS & NOTES (continued)
Cable/Satellite TV (continued)
Charter Communications Operating LLC/
Charter Communications Operating Capital
Senior Sec. Notes
4.20% due 03/15/2028*.................... $ 226,000 $ 228,691
Charter Communications Operating LLC/
Charter Communications Operating Capital
Senior Sec. Notes
4.91% due 07/23/2025..................... 825,000 881,938
Charter Communications Operating LLC/
Charter Communications Operating Capital
Senior Sec. Notes
5.38% due 05/01/2047*.................... 58,000 60,254
Charter Communications Operating LLC/
Charter Communications Operating Capital
Senior Sec. Notes
6.38% due 10/23/2035..................... 138,000 161,408
CSC Holdings LLC
Company Guar. Notes
5.50% due 04/15/2027*.................... 905,000 941,200
DISH DBS Corp.
Company Guar. Notes
7.75% due 07/01/2026..................... 820,000 941,499
----------
4,310,662
----------
Casino Hotels -- 0.2%
Caesars Growth Properties Holdings LLC/
Caesars Growth Properties Finance, Inc.
Sec. Notes
9.38% due 05/01/2022..................... 670,000 720,250
----------
Cellular Telecom -- 1.1%
Sprint Corp.
Company Guar. Notes
7.25% due 09/15/2021..................... 834,000 926,782
Sprint Corp.
Company Guar. Notes
7.88% due 09/15/2023..................... 2,557,000 2,966,120
United States Cellular Corp.
Senior Notes
6.70% due 12/15/2033..................... 123,000 128,074
----------
4,020,976
----------
Chemicals-Diversified -- 0.3%
Eastman Chemical Co.
Senior Notes
1.88% due 11/23/2026..................... EUR 310,000 380,255
Hexion, Inc.
Senior Sec. Notes
6.63% due 04/15/2020..................... 695,000 622,025
----------
1,002,280
----------
Chemicals-Specialty -- 0.0%
Lubrizol Corp.
Company Guar. Notes
6.50% due 10/01/2034..................... 133,000 175,001
----------
Principal Value
Security Description Amount** (Note 2)
Circuit Boards -- 0.2%
TTM Technologies, Inc.
Company Guar. Notes
5.63% due 10/01/2025*..................... $ 630,000 $ 637,481
----------
Coal -- 0.2%
SunCoke Energy Partners LP/SunCoke Energy
Partners Finance Corp.
Company Guar. Notes
7.50% due 06/15/2025*..................... 800,000 826,000
----------
Coatings/Paint -- 0.1%
RPM International, Inc.
Senior Notes
3.75% due 03/15/2027...................... 68,000 68,924
Sherwin-Williams Co.
Senior Notes
2.25% due 05/15/2020...................... 209,000 209,827
Sherwin-Williams Co.
Senior Notes
2.75% due 06/01/2022...................... 179,000 180,205
----------
458,956
----------
Commercial Services -- 0.1%
Ecolab, Inc.
Senior Notes
1.00% due 01/15/2024...................... EUR 250,000 297,939
Ecolab, Inc.
Senior Notes
2.38% due 08/10/2022...................... 222,000 221,755
----------
519,694
----------
Commercial Services-Finance -- 0.0%
Automatic Data Processing, Inc.
Senior Notes
2.25% due 09/15/2020...................... 94,000 94,921
----------
Computer Services -- 0.7%
Harland Clarke Holdings Corp.
Senior Sec. Notes
8.38% due 08/15/2022*..................... 595,000 636,650
Harland Clarke Holdings Corp.
Senior Notes
9.25% due 03/01/2021*..................... 975,000 1,004,250
IBM Credit LLC
Senior Notes
1.63% due 09/06/2019...................... 271,000 270,792
Leidos Holdings, Inc.
Senior Sec. Notes
4.45% due 12/01/2020...................... 679,000 $ 713,969
----------
2,625,661
----------
Computers -- 0.9%
Apple, Inc.
Senior Notes
1.38% due 05/24/2029...................... EUR 470,000 555,243
Apple, Inc.
Senior Notes
2.85% due 05/06/2021...................... 191,000 196,267
Apple, Inc.
Senior Notes
2.85% due 02/23/2023...................... 181,000 185,338
21
AIG Strategic Bond Fund
PORTFOLIO OF INVESTMENTS -- September 30, 2017 -- (unaudited)
(continued)
Principal Value
Security Description Amount** (Note 2)
U.S. CORPORATE BONDS & NOTES (continued)
Computers (continued)
Dell International LLC/EMC Corp.
Senior Sec. Notes
8.35% due 07/15/2046*....................... $ 135,000 $ 173,385
Diamond 1 Finance Corp./Diamond 2 Finance
Corp.
Senior Sec. Notes
6.02% due 06/15/2026*....................... 1,475,000 1,638,061
Diamond 1 Finance Corp./Diamond 2 Finance
Corp.
Senior Sec. Notes
8.10% due 07/15/2036*....................... 393,000 491,839
Hewlett Packard Enterprise Co.
Senior Notes
6.20% due 10/15/2035........................ 205,000 220,088
----------
3,460,221
----------
Containers-Metal/Glass -- 0.4%
Crown Cork & Seal Co., Inc.
Company Guar. Notes
7.38% due 12/15/2026........................ 667,000 783,725
Owens-Brockway Glass Container, Inc.
Company Guar. Notes
5.38% due 01/15/2025*....................... 565,000 606,669
----------
1,390,394
----------
Containers-Paper/Plastic -- 0.2%
Multi-Color Corp.
Company Guar. Notes
6.13% due 12/01/2022*....................... 546,000 572,754
WestRock Co.
Company Guar. Notes
3.38% due 09/15/2027*....................... 161,000 160,362
----------
733,116
----------
Cosmetics & Toiletries -- 0.2%
First Quality Finance Co., Inc.
Company Guar. Notes
5.00% due 07/01/2025*....................... 548,000 565,125
Procter & Gamble Co.
Senior Notes
2.30% due 02/06/2022........................ 132,000 133,023
----------
698,148
----------
Data Processing/Management -- 0.2%
Fidelity National Information Services, Inc.
Senior Notes
1.10% due 07/15/2024........................ EUR 450,000 529,233
Fidelity National Information Services, Inc.
Senior Notes
4.50% due 08/15/2046........................ 84,000 86,954
----------
616,187
----------
Distribution/Wholesale -- 0.2%
H&E Equipment Services, Inc.
Company Guar. Notes
5.63% due 09/01/2025*....................... 625,000 659,375
----------
Principal Value
Security Description Amount** (Note 2)
Diversified Banking Institutions -- 2.1%
Bank of America Corp.
Senior Notes
2.37% due 07/21/2021..... $146,000 $146,011
Bank of America Corp.
Senior Notes
3.59% due 07/21/2028..... 147,000 148,427
Bank of America Corp.
Sub. Notes
4.18% due 11/25/2027..... 605,000 627,068
Citigroup, Inc.
Senior Notes
2.88% due 07/24/2023..... 229,000 229,291
Citigroup, Inc.
Senior Notes
3.67% due 07/24/2028..... 129,000 130,263
Citigroup, Inc.
Sub. Notes
4.40% due 06/10/2025..... 396,000 416,889
Citigroup, Inc.
Sub. Notes
4.45% due 09/29/2027..... 453,000 478,158
Citigroup, Inc.
Sub. Notes
6.00% due 10/31/2033..... 108,000 130,973
Goldman Sachs Group, Inc.
Senior Notes
2.13% due 09/30/2024..... EUR 400,000 500,560
Goldman Sachs Group, Inc.
Senior Notes
2.63% due 08/19/2020..... EUR 275,000 348,270
Goldman Sachs Group, Inc.
Senior Notes
2.91% due 06/05/2023..... 222,000 222,176
Goldman Sachs Group, Inc.
Senior Notes
3.63% due 01/22/2023..... 98,000 101,539
Goldman Sachs Group, Inc.
Senior Notes
6.13% due 02/15/2033..... 338,000 424,475
Goldman Sachs Group, Inc.
Sub. Notes
6.75% due 10/01/2037..... 256,000 337,739
JPMorgan Chase & Co.
Senior Notes
2.55% due 03/01/2021..... 240,000 242,400
JPMorgan Chase & Co.
Senior Notes
2.70% due 05/18/2023..... 28,000 28,007
JPMorgan Chase & Co.
Senior Notes
3.20% due 01/25/2023..... 307,000 314,853
JPMorgan Chase & Co.
Senior Notes
3.88% due 07/24/2038..... 432,000 435,512
Morgan Stanley
Senior Notes
1.75% due 03/11/2024..... EUR 350,000 431,966
22
AIG Strategic Bond Fund
PORTFOLIO OF INVESTMENTS -- September 30, 2017 -- (unaudited)
(continued)
Principal Value
Security Description Amount** (Note 2)
U.S. CORPORATE BONDS & NOTES (continued)
Diversified Banking Institutions (continued)
Morgan Stanley
Senior Notes
2.38% due 03/31/2021................ EUR 350,000 $ 444,395
Morgan Stanley
Senior Notes
2.75% due 05/19/2022................ 413,000 415,285
Morgan Stanley
Senior Notes
3.59% due 07/22/2028................ 140,000 140,522
Morgan Stanley
Senior Notes
3.97% due 07/22/2038................ 108,000 108,617
Morgan Stanley
Sub. Notes
4.10% due 05/22/2023................ 308,000 322,054
Morgan Stanley
Sub. Notes
5.00% due 11/24/2025................ 450,000 493,189
----------
7,618,639
----------
Diversified Financial Services -- 0.1%
USAA Capital Corp.
Senior Notes
2.13% due 06/03/2019*............... 270,000 270,916
----------
Diversified Manufacturing Operations -- 0.2%
Illinois Tool Works, Inc.
Senior Notes
2.65% due 11/15/2026................ 101,000 98,508
Textron, Inc.
Senior Notes
3.38% due 03/01/2028................ 215,000 213,463
Textron, Inc.
Senior Notes
4.00% due 03/15/2026................ 157,000 163,838
Trinity Industries, Inc.
Company Guar. Notes
4.55% due 10/01/2024................ 184,000 185,965
----------
661,774
----------
E-Commerce/Products -- 0.0%
Amazon.com, Inc.
Senior Notes
3.88% due 08/22/2037*............... 100,000 101,768
----------
Electric Products-Misc. -- 0.1%
WESCO Distribution, Inc.
Company Guar. Notes
5.38% due 06/15/2024................ 451,000 475,805
----------
Electric-Distribution -- 0.2%
NextEra Energy Operating Partners LP
Company Guar. Notes
4.25% due 09/15/2024*............... 482,000 492,242
NextEra Energy Operating Partners LP
Company Guar. Notes
4.50% due 09/15/2027*............... 262,000 266,913
----------
759,155
----------
Principal Value
Security Description Amount** (Note 2)
Electric-Generation -- 0.1%
Basin Electric Power Cooperative
1st Mtg. Notes
4.75% due 04/26/2047*.............. $ 322,000 $ 348,474
----------
Electric-Integrated -- 0.7%
Dominion Energy, Inc.
Junior Sub. Notes
2.58% due 07/01/2020............... 105,000 105,876
Dominion Resources, Inc.
Junior Sub. Notes
2.96% due 07/01/2019............... 67,000 67,963
Dominion Resources, Inc.
Senior Notes
5.25% due 08/01/2033............... 405,000 463,573
Duke Energy Progress LLC
1st Mtg. Notes
2.80% due 05/15/2022............... 157,000 160,132
Exelon Corp.
Junior Sub. Notes
3.50% due 06/01/2022............... 194,000 199,838
FirstEnergy Corp.
Senior Notes
3.90% due 07/15/2027............... 216,000 219,356
FirstEnergy Corp.
Senior Notes
4.85% due 07/15/2047............... 111,000 116,489
FirstEnergy Corp.
Senior Notes
7.38% due 11/15/2031............... 283,000 376,483
Georgia Power Co.
Senior Notes
2.00% due 09/08/2020............... 136,000 135,603
Massachusetts Electric Co.
Notes
4.00% due 08/15/2046*.............. 264,000 268,164
Pacific Gas & Electric Co.
Senior Notes
4.00% due 12/01/2046............... 167,000 175,034
South Carolina Electric & Gas Co.
1st Mtg. Bonds
5.10% due 06/01/2065............... 112,000 129,920
Trans-Allegheny Interstate Line Co.
Senior Notes
3.85% due 06/01/2025*.............. 20,000 20,912
----------
2,439,343
----------
Electronic Components-Misc. -- 0.0%
Corning, Inc.
Senior Notes
1.50% due 05/08/2018............... 124,000 123,843
----------
Electronic Components-Semiconductors -- 0.1%
Intel Corp.
Senior Notes
2.35% due 05/11/2022............... 449,000 452,206
----------
Electronic Parts Distribution -- 0.2%
Ingram Micro, Inc.
Senior Notes
5.45% due 12/15/2024............... 615,000 631,229
----------
23
AIG Strategic Bond Fund
PORTFOLIO OF INVESTMENTS -- September 30, 2017 -- (unaudited)
(continued)
Principal Value
Security Description Amount** (Note 2)
U.S. CORPORATE BONDS & NOTES (continued)
Electronic Security Devices -- 0.0%
Allegion US Holding Co., Inc.
Company Guar. Notes
3.55% due 10/01/2027............... $ 110,000 $ 109,047
----------
Energy-Alternate Sources -- 0.5%
Pattern Energy Group, Inc.
Company Guar. Notes
5.88% due 02/01/2024*.............. 960,000 1,012,800
TerraForm Power Operating LLC
Company Guar. Notes
6.38% due 02/01/2023*.............. 650,000 676,000
----------
1,688,800
----------
Enterprise Software/Service -- 0.6%
Donnelley Financial Solutions, Inc.
Company Guar. Notes
8.25% due 10/15/2024............... 1,351,000 1,445,570
Oracle Corp.
Senior Notes
1.90% due 09/15/2021............... 219,000 217,402
Oracle Corp.
Senior Notes
3.85% due 07/15/2036............... 376,000 389,137
Oracle Corp.
Senior Notes
3.90% due 05/15/2035............... 51,000 53,485
----------
2,105,594
----------
Finance-Auto Loans -- 0.6%
Ally Financial, Inc.
Sub. Notes
5.75% due 11/20/2025............... 1,385,000 1,501,617
Credit Acceptance Corp.
Company Guar. Notes
7.38% due 03/15/2023............... 651,000 688,432
----------
2,190,049
----------
Finance-Consumer Loans -- 0.7%
Enova International, Inc.
Company Guar. Notes
8.50% due 09/01/2024*.............. 955,000 953,806
Enova International, Inc.
Company Guar. Notes
9.75% due 06/01/2021............... 101,000 106,555
Navient Corp.
Senior Notes
5.63% due 08/01/2033............... 611,000 527,476
Springleaf Finance Corp.
Company Guar. Notes
6.13% due 05/15/2022............... 855,000 905,488
----------
2,493,325
----------
Finance-Credit Card -- 0.4%
Alliance Data Systems Corp.
Company Guar. Notes
5.88% due 11/01/2021*.............. 750,000 780,000
American Express Co.
Senior Notes
2.50% due 08/01/2022............... 522,000 521,402
----------
1,301,402
----------
Principal Value
Security Description Amount** (Note 2)
Finance-Investment Banker/Broker -- 0.3%
E*TRADE Financial Corp.
Senior Notes
3.80% due 08/24/2027.............................. $ 56,000 $ 56,670
Lehman Brothers Holdings, Inc.
Escrow Notes
6.75% due 12/28/2017+(3)(4)....................... 280,000 28
Lehman Brothers Holdings, Inc.
Escrow Notes
7.50% due 05/11/2038+(3)(4)....................... 361,000 36
LPL Holdings, Inc.
Company Guar. Notes
5.75% due 09/15/2025*............................. 740,000 767,158
TD Ameritrade Holding Corp.
Senior Notes
2.95% due 04/01/2022.............................. 151,000 154,106
--------
977,998
--------
Finance-Leasing Companies -- 0.1%
International Lease Finance Corp.
Senior Notes
5.88% due 08/15/2022.............................. 145,000 162,360
Washington Prime Group LP
Senior Notes
5.95% due 08/15/2024.............................. 104,000 105,984
--------
268,344
--------
Finance-Mortgage Loan/Banker -- 0.2%
Quicken Loans, Inc.
Company Guar. Notes
5.75% due 05/01/2025*............................. 850,000 892,500
--------
Finance-Other Services -- 0.1%
National Rural Utilities Cooperative Finance Corp.
Collateral Trust Bonds
2.00% due 01/27/2020.............................. 207,000 207,344
National Rural Utilities Cooperative Finance Corp.
Collateral Trust Bonds
2.30% due 11/01/2020.............................. 90,000 90,725
National Rural Utilities Cooperative Finance Corp.
Senior Notes
2.30% due 09/15/2022.............................. 150,000 148,982
National Rural Utilities Cooperative Finance Corp.
Collateral Trust Notes
2.40% due 04/25/2022.............................. 91,000 91,560
--------
538,611
--------
Food-Meat Products -- 0.0%
Smithfield Foods, Inc.
Senior Notes
2.65% due 10/03/2021*............................. 84,000 83,915
Smithfield Foods, Inc.
Company Guar. Notes
4.25% due 02/01/2027*............................. 58,000 59,960
--------
143,875
--------
Food-Misc./Diversified -- 0.1%
Kraft Heinz Foods Co.
Sec. Notes
4.88% due 02/15/2025*............................. 216,000 230,853
--------
24
AIG Strategic Bond Fund
PORTFOLIO OF INVESTMENTS -- September 30, 2017 -- (unaudited)
(continued)
Principal Value
Security Description Amount** (Note 2)
U.S. CORPORATE BONDS & NOTES (continued)
Food-Retail -- 0.3%
Albertsons Cos. LLC/Safeway, Inc./New
Albertson's, Inc./Albertson's LLC
Company Guar. Notes
5.75% due 03/15/2025....................... $ 950,000 $ 836,000
Kroger Co.
Senior Notes
4.65% due 01/15/2048....................... 219,000 211,827
----------
1,047,827
----------
Food-Wholesale/Distribution -- 0.1%
C&S Group Enterprises LLC
Senior Sec. Notes
5.38% due 07/15/2022*...................... 475,000 470,250
----------
Gambling (Non-Hotel) -- 0.4%
Mohegan Gaming & Entertainment
Company Guar. Notes
7.88% due 10/15/2024*...................... 630,000 669,375
Scientific Games International, Inc.
Company Guar. Notes
10.00% due 12/01/2022...................... 565,000 625,738
Waterford Gaming LLC/Waterford Gaming
Financial Corp.
Escrow Notes
8.63% due 09/15/2014*+(3)(4)............... 478,062 7,075
----------
1,302,188
----------
Gas-Distribution -- 0.1%
Dominion Gas Holdings LLC
Senior Notes
4.80% due 11/01/2043....................... 136,000 146,843
NiSource Finance Corp.
Company Guar. Notes
3.49% due 05/15/2027....................... 93,000 94,134
NiSource Finance Corp.
Company Guar. Notes
4.38% due 05/15/2047....................... 72,000 75,543
Sempra Energy
Senior Notes
3.25% due 06/15/2027....................... 55,000 54,317
----------
370,837
----------
Hazardous Waste Disposal -- 0.2%
Clean Harbors, Inc.
Company Guar. Notes
5.13% due 06/01/2021....................... 543,000 551,650
----------
Hotels/Motels -- 0.2%
Hilton Grand Vacations Borrower LLC/Hilton
Grand Vacations Borrower, Inc.
Company Guar. Notes
6.13% due 12/01/2024*...................... 567,000 621,716
----------
Independent Power Producers -- 0.2%
Calpine Corp.
Senior Sec. Notes
5.25% due 06/01/2026*...................... 625,000 621,875
NRG Yield Operating LLC
Company Guar. Notes
5.00% due 09/15/2026....................... 275,000 286,000
----------
907,875
----------
Principal Value
Security Description Amount** (Note 2)
Industrial Gases -- 0.0%
Airgas, Inc.
Company Guar. Notes
3.05% due 08/01/2020................... $ 62,000 $ 63,416
----------
Insurance-Life/Health -- 0.1%
Aflac, Inc.
Senior Notes
4.00% due 10/15/2046................... 108,000 107,759
Brighthouse Financial, Inc.
Senior Notes
4.70% due 06/22/2047*.................. 265,000 258,868
Pacific LifeCorp
Senior Notes
6.00% due 02/10/2020*.................. 159,000 171,432
----------
538,059
----------
Insurance-Multi-line -- 0.3%
Assurant, Inc.
Senior Notes
6.75% due 02/15/2034................... 168,000 205,804
MetLife, Inc.
Senior Notes
4.60% due 05/13/2046................... 102,000 112,263
Metropolitan Life Global Funding I
Sec. Notes
2.30% due 04/10/2019*.................. 809,000 814,639
----------
1,132,706
----------
Insurance-Mutual -- 0.2%
Massachusetts Mutual Life Insurance Co.
Sub. Notes
4.50% due 04/15/2065*.................. 80,000 81,680
Massachusetts Mutual Life Insurance Co.
Sub. Notes
4.90% due 04/01/2077*.................. 34,000 36,831
MassMutual Global Funding II
Senior Sec. Notes
2.50% due 10/17/2022*.................. 145,000 145,207
New York Life Global Funding
Sec. Notes
1.95% due 09/28/2020*.................. 377,000 374,352
----------
638,070
----------
Insurance-Reinsurance -- 0.0%
Berkshire Hathaway, Inc.
Senior Notes
1.15% due 08/15/2018................... 148,000 147,565
----------
Internet Connectivity Services -- 0.4%
Cogent Communications Group, Inc.
Senior Sec. Notes
5.38% due 03/01/2022*.................. 687,000 722,209
Zayo Group LLC/Zayo Capital, Inc.
Company Guar. Notes
6.38% due 05/15/2025................... 685,000 738,176
----------
1,460,385
----------
Internet Content-Entertainment -- 0.3%
Netflix, Inc.
Senior Notes
5.88% due 02/15/2025................... 851,000 930,781
----------
25
AIG Strategic Bond Fund
PORTFOLIO OF INVESTMENTS -- September 30, 2017 -- (unaudited)
(continued)
Principal Value
Security Description Amount** (Note 2)
U.S. CORPORATE BONDS & NOTES (continued)
Investment Management/Advisor Services -- 0.3%
Drawbridge Special Opportunities Fund LP/
Drawbridge Special Opportunities Finance
Senior Notes
5.00% due 08/01/2021*.................... $1,106,000 $1,127,219
----------
Machinery-Construction & Mining -- 0.2%
Caterpillar Financial Services Corp.
Senior Notes
1.85% due 09/04/2020..................... 225,000 223,962
Caterpillar Financial Services Corp.
Senior Notes
3.30% due 06/09/2024..................... 228,000 235,638
Terex Corp.
Company Guar. Notes
5.63% due 02/01/2025*.................... 420,000 442,575
----------
902,175
----------
Machinery-Farming -- 0.0%
CNH Industrial Capital LLC
Company Guar. Notes
4.38% due 04/05/2022..................... 103,000 108,150
----------
Machinery-General Industrial -- 0.0%
Roper Technologies, Inc.
Senior Notes
3.80% due 12/15/2026..................... 56,000 57,644
----------
Marine Services -- 0.3%
Great Lakes Dredge & Dock Corp.
Company Guar. Notes
8.00% due 05/15/2022..................... 905,000 938,937
----------
Medical Labs & Testing Services -- 0.0%
Laboratory Corp. of America Holdings
Senior Notes
3.20% due 02/01/2022..................... 65,000 66,528
Laboratory Corp. of America Holdings
Senior Notes
3.25% due 09/01/2024..................... 95,000 95,277
----------
161,805
----------
Medical Products -- 0.3%
Becton Dickinson and Co.
Senior Notes
0.37% due 06/06/2019..................... EUR 335,000 397,892
Becton Dickinson and Co.
Senior Notes
1.90% due 12/15/2026..................... EUR 300,000 356,419
Becton Dickinson and Co.
Senior Notes
3.70% due 06/06/2027..................... 365,000 369,048
----------
1,123,359
----------
Medical-Biomedical/Gene -- 0.1%
Amgen, Inc.
Senior Notes
2.65% due 05/11/2022..................... 192,000 193,568
Baxalta, Inc.
Company Guar. Notes
3.60% due 06/23/2022..................... 162,000 167,861
Principal Value
Security Description Amount** (Note 2)
Medical-Biomedical/Gene (continued)
Celgene Corp.
Senior Notes
3.63% due 05/15/2024......................... $ 154,000 $ 160,435
----------
521,864
----------
Medical-Drugs -- 0.2%
Endo Finance LLC/Endo Finco, Inc.
Company Guar. Notes
5.38% due 01/15/2023*........................ 500,000 407,500
Forest Laboratories LLC
Company Guar. Notes
4.88% due 02/15/2021*........................ 122,000 131,011
Johnson & Johnson
Senior Notes
3.63% due 03/03/2037......................... 58,000 60,271
----------
598,782
----------
Medical-Generic Drugs -- 0.1%
Actavis, Inc.
Company Guar. Notes
3.25% due 10/01/2022......................... 221,000 226,772
----------
Medical-HMO -- 0.2%
Cigna Corp.
Senior Notes
3.88% due 10/15/2047......................... 226,000 225,221
UnitedHealth Group, Inc.
Senior Notes
1.40% due 12/15/2017......................... 213,000 212,970
UnitedHealth Group, Inc.
Senior Notes
2.13% due 03/15/2021......................... 155,000 154,983
----------
593,174
----------
Medical-Hospitals -- 0.9%
CHS/Community Health Systems, Inc.
Senior Sec. Notes
6.25% due 03/31/2023......................... 560,000 550,200
HCA, Inc.
Senior Sec. Notes
5.25% due 06/15/2026......................... 719,000 774,723
HCA, Inc.
Company Guar. Notes
7.50% due 11/15/2095......................... 822,000 848,715
Tenet Healthcare Corp.
Senior Sec. Notes
4.63% due 07/15/2024*........................ 1,044,000 1,034,562
----------
3,208,200
----------
Metal Processors & Fabrication -- 0.4%
Grinding Media, Inc./Moly-Cop AltaSteel, Ltd.
Senior Sec. Notes
7.38% due 12/15/2023*........................ 805,000 873,425
Novelis Corp.
Company Guar. Notes
5.88% due 09/30/2026*........................ 300,000 304,500
Novelis Corp.
Company Guar. Notes
6.25% due 08/15/2024*........................ 396,000 412,909
----------
1,590,834
----------
26
AIG Strategic Bond Fund
PORTFOLIO OF INVESTMENTS -- September 30, 2017 -- (unaudited)
(continued)
Principal Value
Security Description Amount** (Note 2)
U.S. CORPORATE BONDS & NOTES (continued)
Metal-Diversified -- 0.0%
Glencore Funding LLC
Company Guar. Notes
4.00% due 03/27/2027*...... $ 148,000 $148,896
--------
Multimedia -- 0.1%
Time Warner, Inc.
Company Guar. Notes
4.85% due 07/15/2045....... 111,000 112,807
Viacom, Inc.
Senior Notes
5.25% due 04/01/2044....... 56,000 53,632
Walt Disney Co.
Senior Notes
1.65% due 01/08/2019....... 76,000 76,053
--------
242,492
--------
Networking Products -- 0.1%
Cisco Systems, Inc.
Senior Notes
2.13% due 03/01/2019....... 243,000 244,834
Cisco Systems, Inc.
Senior Notes
2.20% due 02/28/2021....... 173,000 174,003
--------
418,837
--------
Non-Hazardous Waste Disposal -- 0.1%
Wrangler Buyer Corp.
Senior Notes
6.00% due 10/01/2025*...... 345,000 351,038
--------
Oil Companies-Exploration & Production -- 2.0%
Anadarko Petroleum Corp.
Senior Notes
6.45% due 09/15/2036....... 257,000 304,030
Carrizo Oil & Gas, Inc.
Company Guar. Notes
6.25% due 04/15/2023....... 575,000 583,625
Concho Resources, Inc.
Company Guar. Notes
3.75% due 10/01/2027....... 87,000 87,387
Concho Resources, Inc.
Company Guar. Notes
4.38% due 01/15/2025....... 214,000 225,235
Concho Resources, Inc.
Company Guar. Notes
4.88% due 10/01/2047....... 88,000 91,832
Continental Resources, Inc.
Company Guar. Notes
5.00% due 09/15/2022....... 590,000 599,587
Denbury Resources, Inc.
Sec. Notes
9.00% due 05/15/2021*...... 455,000 444,194
Devon Energy Corp.
Senior Notes
5.00% due 06/15/2045....... 74,000 77,980
Devon Energy Corp.
Senior Notes
5.60% due 07/15/2041....... 75,000 82,080
Principal Value
Security Description Amount** (Note 2)
Oil Companies-Exploration & Production (continued)
EP Energy LLC/Everest Acquisition Finance, Inc.
Senior Sec. Notes
8.00% due 11/29/2024*.......................... $ 810,000 $ 818,100
Hess Corp.
Senior Notes
4.30% due 04/01/2027........................... 58,000 57,489
Hess Corp.
Senior Notes
5.60% due 02/15/2041........................... 191,000 191,375
Hilcorp Energy I LP/Hilcorp Finance Co.
Senior Notes
5.00% due 12/01/2024*.......................... 1,060,000 1,038,800
Marathon Oil Corp.
Senior Notes
4.40% due 07/15/2027........................... 156,000 159,077
Marathon Oil Corp.
Senior Notes
6.60% due 10/01/2037........................... 206,000 236,987
Newfield Exploration Co.
Senior Notes
5.38% due 01/01/2026........................... 559,000 587,649
RSP Permian, Inc.
Company Guar. Notes
5.25% due 01/15/2025*.......................... 600,000 609,000
Sanchez Energy Corp.
Company Guar. Notes
6.13% due 01/15/2023........................... 706,000 603,630
WPX Energy, Inc.
Senior Notes
7.50% due 08/01/2020........................... 503,000 547,013
----------
7,345,070
----------
Oil Companies-Integrated -- 0.2%
Chevron Corp.
Senior Notes
1.96% due 03/03/2020........................... 135,000 135,528
Chevron Corp.
Senior Bonds
1.99% due 03/03/2020........................... 394,000 395,483
Chevron Corp.
Senior Notes
2.50% due 03/03/2022........................... 94,000 94,781
Exxon Mobil Corp.
Senior Notes
1.31% due 03/06/2018........................... 151,000 150,920
----------
776,712
----------
Oil Field Machinery & Equipment -- 0.2%
Forum Energy Technologies, Inc.
Company Guar. Notes
6.25% due 10/01/2021........................... 610,000 611,525
----------
Oil Refining & Marketing -- 0.5%
Murphy Oil USA, Inc.
Company Guar. Notes
5.63% due 05/01/2027........................... 556,000 597,700
PBF Holding Co LLC/PBF Finance Corp.
Company Guar. Notes
7.25% due 06/15/2025*.......................... 1,155,000 1,180,987
----------
1,778,687
----------
27
AIG Strategic Bond Fund
PORTFOLIO OF INVESTMENTS -- September 30, 2017 -- (unaudited)
(continued)
Principal Value
Security Description Amount** (Note 2)
U.S. CORPORATE BONDS & NOTES (continued)
Oil-Field Services -- 0.2%
Bristow Group, Inc.
Company Guar. Notes
6.25% due 10/15/2022.......................... $ 961,000 $ 672,700
Halliburton Co.
Senior Notes
4.85% due 11/15/2035.......................... 56,000 60,710
----------
733,410
----------
Paper & Related Products -- 0.4%
Domtar Corp.
Company Guar. Notes
6.75% due 02/15/2044.......................... 197,000 217,968
Georgia-Pacific LLC
Senior Notes
3.60% due 03/01/2025*......................... 372,000 384,414
Georgia-Pacific LLC
Senior Notes
3.73% due 07/15/2023*......................... 508,000 535,522
Georgia-Pacific LLC
Company Guar. Notes
5.40% due 11/01/2020*......................... 208,000 227,926
International Paper Co.
Senior Notes
4.40% due 08/15/2047.......................... 41,000 41,472
International Paper Co.
Senior Notes
5.00% due 09/15/2035.......................... 80,000 88,736
----------
1,496,038
----------
Pharmacy Services -- 0.1%
Express Scripts Holding Co.
Company Guar. Notes
3.00% due 07/15/2023.......................... 81,000 81,098
Express Scripts Holding Co.
Company Guar. Notes
4.80% due 07/15/2046.......................... 124,000 130,936
----------
212,034
----------
Pipelines -- 2.7%
Antero Midstream Partners LP/Antero Midstream
Finance Corp.
Company Guar. Notes
5.38% due 09/15/2024.......................... 507,000 524,745
Cheniere Corpus Christi Holdings LLC
Senior Sec. Notes
7.00% due 06/30/2024.......................... 1,240,000 1,413,600
Cheniere Energy Partners LP
Senior Sec. Notes
5.25% due 10/01/2025*......................... 702,000 717,795
Columbia Pipeline Group, Inc.
Company Guar. Notes
2.45% due 06/01/2018.......................... 45,000 45,155
Enable Midstream Partners LP
Senior Notes
5.00% due 05/15/2044.......................... 123,000 119,741
Enbridge Energy Partners LP
Senior Notes
7.38% due 10/15/2045.......................... 108,000 139,127
Principal Value
Security Description Amount** (Note 2)
Pipelines (continued)
Energy Transfer Partners LP
Senior Notes
4.90% due 03/15/2035............................... $ 87,000 $ 86,450
Energy Transfer Partners LP
Senior Notes
6.05% due 06/01/2041............................... 22,000 23,766
Energy Transfer Partners LP
Senior Notes
6.63% due 10/15/2036............................... 277,000 315,100
EnLink Midstream Partners LP
Senior Notes
4.85% due 07/15/2026............................... 143,000 149,634
EnLink Midstream Partners LP
Senior Notes
5.05% due 04/01/2045............................... 141,000 135,843
Genesis Energy LP/Genesis Energy Finance Corp.
Company Guar. Notes
5.63% due 06/15/2024............................... 847,000 821,590
Genesis Energy LP/Genesis Energy Finance Corp.
Company Guar. Notes
6.00% due 05/15/2023............................... 532,000 528,010
Holly Energy Partners LP/Holly Energy Finance Corp.
Company Guar. Notes
6.00% due 08/01/2024*.............................. 672,000 704,760
NGPL PipeCo LLC
Senior Notes
4.38% due 08/15/2022*.............................. 174,000 180,525
ONEOK, Inc.
Company Guar. Notes
4.00% due 07/13/2027............................... 176,000 178,182
Phillips 66 Partners LP
Senior Notes
4.90% due 10/01/2046............................... 66,000 66,058
Sabine Pass Liquefaction LLC
Senior Sec. Notes
5.00% due 03/15/2027............................... 112,000 119,457
SemGroup Corp.
Company Guar. Notes
7.25% due 03/15/2026*.............................. 707,000 710,535
SemGroup Corp./Rose Rock Finance Corp.
Company Guar. Notes
5.63% due 07/15/2022............................... 731,000 714,552
Summit Midstream Holdings LLC/Summit
Midstream Finance Corp.
Company Guar. Notes
5.50% due 08/15/2022............................... 742,000 745,710
Sunoco Logistics Partners Operations LP
Company Guar. Notes
5.40% due 10/01/2047............................... 68,000 69,170
Tallgrass Energy Partners LP/Tallgrass Energy
Finance Corp.
Company Guar. Notes
5.50% due 09/15/2024*.............................. 823,000 845,632
Western Gas Partners LP
Senior Notes
4.65% due 07/01/2026............................... 153,000 160,363
28
AIG Strategic Bond Fund
PORTFOLIO OF INVESTMENTS -- September 30, 2017 -- (unaudited)
(continued)
Principal Value
Security Description Amount** (Note 2)
U.S. CORPORATE BONDS & NOTES (continued)
Pipelines (continued)
Williams Partners LP
Senior Notes
3.75% due 06/15/2027...................... $121,000 $ 120,825
Williams Partners LP
Senior Notes
5.10% due 09/15/2045...................... 260,000 273,284
----------
9,909,609
----------
Platinum -- 0.2%
Stillwater Mining Co.
Company Guar. Notes
7.13% due 06/27/2025*..................... 560,000 574,017
----------
Poultry -- 0.2%
Pilgrim's Pride Corp.
Senior Notes
5.88% due 09/30/2027*..................... 635,000 648,494
----------
Power Converter/Supply Equipment -- 0.1%
Hubbell, Inc.
Senior Notes
3.15% due 08/15/2027...................... 77,000 76,959
Hubbell, Inc.
Senior Notes
3.35% due 03/01/2026...................... 139,000 140,713
----------
217,672
----------
Precious Metals -- 0.2%
Coeur Mining, Inc.
Company Guar. Notes
5.88% due 06/01/2024...................... 730,000 730,000
----------
Publishing-Books -- 0.2%
McGraw-Hill Global Education Holdings LLC/
McGraw-Hill Global Education Finance
Senior Notes
7.88% due 05/15/2024*..................... 630,000 621,338
----------
Racetracks -- 0.1%
GLP Capital LP/GLP Financing II, Inc.
Company Guar. Notes
5.38% due 04/15/2026...................... 490,000 534,713
----------
Radio -- 0.2%
Sirius XM Radio, Inc.
Company Guar. Notes
5.38% due 07/15/2026*..................... 795,000 836,737
----------
Real Estate Investment Trusts -- 1.5%
CTR Partnership LP/CareTrust Capital Corp.
Company Guar. Notes
5.25% due 06/01/2025...................... 869,000 894,288
ESH Hospitality, Inc.
Company Guar. Notes
5.25% due 05/01/2025*..................... 635,000 656,431
GEO Group, Inc.
Company Guar. Notes
6.00% due 04/15/2026...................... 595,000 625,494
Goodman US Finance Three LLC
Company Guar. Notes
3.70% due 03/15/2028*..................... 78,000 77,743
Principal Value
Security Description Amount** (Note 2)
Real Estate Investment Trusts (continued)
Goodman US Finance Three LLC
Company Guar. Notes
4.50% due 10/15/2037*.......................... $ 77,000 $ 77,960
Iron Mountain, Inc.
Company Guar. Notes
4.88% due 09/15/2027*.......................... 635,000 644,525
iStar, Inc.
Senior Notes
5.25% due 09/15/2022........................... 692,000 702,380
iStar, Inc.
Senior Notes
6.00% due 04/01/2022........................... 310,000 320,850
MPT Operating Partnership LP/MPT Finance Corp.
Company Guar. Notes
5.00% due 10/15/2027........................... 769,000 788,225
Simon Property Group LP
Senior Notes
4.25% due 11/30/2046........................... 31,000 31,650
Starwood Property Trust, Inc.
Senior Notes
5.00% due 12/15/2021........................... 818,000 853,787
----------
5,673,333
----------
Real Estate Management/Services -- 0.5%
Kennedy-Wilson, Inc.
Company Guar. Notes
5.88% due 04/01/2024........................... 925,000 952,750
Realogy Group LLC/Realogy Co-Issuer Corp.
Company Guar. Notes
4.88% due 06/01/2023*.......................... 865,000 888,787
----------
1,841,537
----------
Rental Auto/Equipment -- 0.4%
Herc Rentals, Inc.
Sec. Notes
7.75% due 06/01/2024*.......................... 605,000 656,425
United Rentals North America, Inc.
Company Guar. Notes
4.88% due 01/15/2028........................... 635,000 638,175
----------
1,294,600
----------
Resort/Theme Parks -- 0.2%
Six Flags Entertainment Corp.
Company Guar. Notes
4.88% due 07/31/2024*.......................... 710,000 722,425
----------
Retail-Appliances -- 0.2%
Conn's, Inc.
Company Guar. Notes
7.25% due 07/15/2022........................... 858,000 836,550
----------
Retail-Auto Parts -- 0.0%
O'Reilly Automotive, Inc.
Senior Notes
3.60% due 09/01/2027........................... 134,000 133,913
----------
Retail-Automobile -- 0.2%
Lithia Motors, Inc.
Company Guar. Notes
5.25% due 08/01/2025*.......................... 613,000 636,754
----------
29
AIG Strategic Bond Fund
PORTFOLIO OF INVESTMENTS -- September 30, 2017 -- (unaudited)
(continued)
Principal Value
Security Description Amount** (Note 2)
U.S. CORPORATE BONDS & NOTES (continued)
Retail-Discount -- 0.1%
Costco Wholesale Corp.
Senior Notes
2.25% due 02/15/2022................. $ 260,000 $ 260,905
----------
Retail-Drug Store -- 0.1%
CVS Pass-Through Trust
Pass-Through Certs.
4.70% due 01/10/2036*................ 136,217 146,060
CVS Pass-Through Trust
Pass-Through Certs.
5.77% due 01/10/2033*................ 110,052 123,813
CVS Pass-Through Trust
Pass-Through Certs.
5.93% due 01/10/2034*................ 176,136 201,145
----------
471,018
----------
Retail-Misc./Diversified -- 0.1%
FirstCash, Inc.
Company Guar. Notes
5.38% due 06/01/2024*................ 470,000 489,975
----------
Retail-Office Supplies -- 0.3%
Arch Merger Sub, Inc.
Senior Notes
8.50% due 09/15/2025*................ 1,225,000 1,191,312
----------
Retail-Restaurants -- 0.5%
Brinker International, Inc.
Company Guar. Notes
5.00% due 10/01/2024*................ 950,000 941,687
Golden Nugget, Inc.
Company Guar. Notes
8.75% due 10/01/2025*................ 715,000 727,513
----------
1,669,200
----------
Rubber/Plastic Products -- 0.0%
Venture Holdings Co. LLC
Company Guar. Notes
11.00% due 06/01/2007 +(3)(4)(5)(6).. 100,000 0
----------
Satellite Telecom -- 0.2%
Hughes Satellite Systems Corp.
Company Guar. Notes
6.63% due 08/01/2026................. 705,000 754,350
----------
Savings & Loans/Thrifts -- 0.5%
Astoria Financial Corp.
Senior Notes
3.50% due 06/08/2020................. 158,000 159,579
First Niagara Financial Group, Inc.
Senior Notes
6.75% due 03/19/2020................. 902,000 1,001,170
First Niagara Financial Group, Inc.
Sub. Notes
7.25% due 12/15/2021................. 539,000 631,293
----------
1,792,042
----------
Semiconductor Components-Integrated Circuits -- 0.0%
QUALCOMM, Inc.
Senior Notes
2.10% due 05/20/2020................. 164,000 165,249
----------
Principal Value
Security Description Amount** (Note 2)
Semiconductor Equipment -- 0.0%
Applied Materials, Inc.
Senior Notes
4.35% due 04/01/2047............. $ 90,000 $ 96,310
----------
Telecom Services -- 0.2%
Embarq Corp.
Senior Notes
8.00% due 06/01/2036............. 815,000 827,225
----------
Telecommunication Equipment -- 0.1%
Plantronics, Inc.
Company Guar. Notes
5.50% due 05/31/2023*............ 417,000 432,638
----------
Telephone-Integrated -- 0.9%
AT&T, Inc.
Senior Notes
2.85% due 02/14/2023............. 221,000 219,612
AT&T, Inc.
Senior Notes
3.15% due 09/04/2036............. EUR 425,000 505,924
AT&T, Inc.
Senior Notes
4.35% due 06/15/2045............. 227,000 208,345
AT&T, Inc.
Senior Notes
4.50% due 05/15/2035............. 278,000 274,466
AT&T, Inc.
Senior Notes
4.75% due 05/15/2046............. 25,000 24,042
AT&T, Inc.
Senior Notes
4.90% due 08/14/2037............. 661,000 668,037
AT&T, Inc.
Senior Notes
5.30% due 08/14/2058............. 269,000 271,920
CenturyLink, Inc.
Senior Notes
5.63% due 04/01/2025............. 295,000 282,463
CenturyLink, Inc.
Senior Notes
5.80% due 03/15/2022............. 301,000 300,007
Verizon Communications, Inc.
Senior Notes
3.38% due 02/15/2025*............ 170,000 170,591
Verizon Communications, Inc.
Senior Notes
4.40% due 11/01/2034............. 112,000 112,072
Verizon Communications, Inc.
Senior Notes
4.67% due 03/15/2055............. 168,000 160,036
Verizon Communications, Inc.
Senior Notes
5.25% due 03/16/2037............. 270,000 296,092
----------
3,493,607
----------
Television -- 0.1%
Belo Corp.
Company Guar. Notes
7.75% due 06/01/2027............. 461,000 522,083
----------
30
AIG Strategic Bond Fund
PORTFOLIO OF INVESTMENTS -- September 30, 2017 -- (unaudited)
(continued)
Principal Value
Security Description Amount** (Note 2)
U.S. CORPORATE BONDS & NOTES (continued)
Transport-Equipment & Leasing -- 0.1%
GATX Corp.
Senior Notes
3.25% due 09/15/2026.......................... $ 72,000 $ 70,926
GATX Corp.
Senior Notes
3.85% due 03/30/2027.......................... 109,000 110,775
------------
181,701
------------
Transport-Rail -- 0.0%
Union Pacific Corp.
Senior Notes
3.60% due 09/15/2037.......................... 149,000 150,778
------------
Transport-Services -- 0.1%
United Parcel Service, Inc.
Senior Notes
2.35% due 05/16/2022.......................... 197,000 198,560
------------
Travel Services -- 0.2%
Sabre GLBL, Inc.
Senior Sec. Notes
5.38% due 04/15/2023*......................... 610,000 632,143
------------
Trucking/Leasing -- 0.0%
Penske Truck Leasing Co. LP/PTL Finance Corp.
Senior Notes
3.38% due 02/01/2022*......................... 95,000 97,543
------------
Wire & Cable Products -- 0.1%
General Cable Corp.
Company Guar. Notes
5.75% due 10/01/2022.......................... 518,000 520,279
------------
Wireless Equipment -- 0.3%
ViaSat, Inc.
Senior Notes
5.63% due 09/15/2025*......................... 950,000 955,985
------------
Total U.S. Corporate Bonds & Notes
(cost $141,253,790)........................... 145,308,588
------------
FOREIGN CORPORATE BONDS & NOTES -- 19.6%
Aerospace/Defense-Equipment -- 0.0%
EADS Finance BV
Company Guar. Notes
2.70% due 04/17/2023*......................... 160,000 161,594
------------
Agricultural Chemicals -- 0.2%
Consolidated Energy Finance SA
Senior Notes
6.88% due 06/15/2025*......................... 730,000 765,588
------------
Airport Development/Maintenance -- 0.1%
Heathrow Funding, Ltd.
Senior Sec. Notes
1.88% due 05/23/2022.......................... EUR 290,000 366,088
------------
Appliances -- 0.1%
Arcelik AS
Senior Notes
5.00% due 04/03/2023.......................... 200,000 205,827
------------
Auto-Cars/Light Trucks -- 0.3%
Hyundai Capital Services, Inc.
Senior Notes
3.00% due 08/29/2022*......................... 201,000 198,282
Principal Value
Security Description Amount** (Note 2)
Auto-Cars/Light Trucks -- 0.1%
RCI Banque SA
Senior Notes
2.25% due 03/29/2021................ EUR 350,000 $ 441,319
Volkswagen International Finance NV
Company Guar. Notes
1.88% due 03/30/2027................ EUR 300,000 356,578
----------
996,179
----------
Auto/Truck Parts & Equipment-Original -- 0.3%
Delphi Jersey Holdings PLC
Senior Notes
5.00% due 10/01/2025*............... 645,000 656,287
Tenedora Nemak SA de CV
Senior Notes
5.50% due 02/28/2023................ 530,000 545,238
----------
1,201,525
----------
Banks-Commercial -- 2.8%
ABN AMRO Bank NV
Senior Notes
2.50% due 11/29/2023................ EUR 200,000 264,440
ABN AMRO Bank NV
Sub. Notes
7.13% due 07/06/2022................ EUR 360,000 546,689
Akbank Turk AS
Senior Notes
5.13% due 03/31/2025................ 380,000 375,687
Banco de Credito del Peru
Senior Notes
5.38% due 09/16/2020................ 200,000 218,000
Banco Macro SA
Sub. Notes
6.75% due 11/04/2026*............... 200,000 210,578
Bank of China, Ltd.
Sub. Notes
5.00% due 11/13/2024................ 540,000 580,410
Barclays Bank PLC
Sub. Notes
6.63% due 03/30/2022................ EUR 200,000 291,365
BPCE SA
Senior Notes
2.88% due 01/16/2024................ EUR 200,000 269,809
BPCE SA
Sub. Notes
2.88% due 04/22/2026................ EUR 200,000 255,119
BPCE SA
Sub. Notes
4.50% due 03/15/2025*............... 265,000 273,850
Canadian Imperial Bank of Commerce
Senior Notes
2.10% due 10/05/2020................ 368,000 367,913
Credit Suisse AG
Senior Notes
3.00% due 10/29/2021................ 254,000 260,782
Credit Suisse AG
Sub. Notes
5.75% due 09/18/2025................ EUR 550,000 734,578
Danske Bank A/S
Sub. Notes
3.88% due 10/04/2023................ EUR 300,000 367,482
31
AIG Strategic Bond Fund
PORTFOLIO OF INVESTMENTS -- September 30, 2017 -- (unaudited)
(continued)
Principal Value
Security Description Amount** (Note 2)
FOREIGN CORPORATE BONDS & NOTES (continued)
Banks-Commercial -- 0.1%
HBOS PLC
Sub. Notes
5.37% due 06/30/2021.................. EUR 600,000 $ 825,757
HSBC Bank PLC
Sub. Notes
5.00% due 03/20/2023.................. GBP 400,000 545,094
ICICI Bank, Ltd.
Senior Notes
5.75% due 11/16/2020.................. 200,000 217,804
ING Groep NV
Senior Notes
0.75% due 03/09/2022.................. EUR 400,000 476,852
Intesa Sanpaolo SpA
Senior Notes
1.13% due 01/14/2020.................. EUR 500,000 604,734
Intesa Sanpaolo SpA
Sub. Notes
5.71% due 01/15/2026*................. 255,000 268,736
Mizuho Bank, Ltd.
Company Guar. Notes
2.15% due 10/20/2018*................. 15,000 15,044
PKO Bank Polski SA Via PKO Finance AB
Senior Notes
4.63% due 09/26/2022.................. 200,000 214,617
Santander Issuances SAU
Company Guar. Notes
3.25% due 04/04/2026.................. EUR 300,000 381,364
Shinhan Bank
Sub. Bonds
3.88% due 03/24/2026*................. 200,000 201,940
Standard Chartered PLC
Sub. Notes
3.13% due 11/19/2024.................. EUR 350,000 448,775
Swedbank AB
Sub. Notes
1.00% due 11/22/2027.................. EUR 600,000 705,986
Toronto-Dominion Bank
Senior Notes
1.85% due 09/11/2020.................. 248,000 247,024
Union National Bank PJSC
Senior Notes
2.75% due 10/05/2021.................. 200,000 198,144
Westpac Banking Corp.
Sub. Notes
4.32% due 11/23/2031.................. 101,000 103,768
-----------
10,472,341
-----------
Banks-Special Purpose -- 0.1%
Nederlandse Waterschapsbank NV
Senior Notes
1.13% due 01/28/2019.................. EUR 170,000 205,177
-----------
Beverages-Non-alcoholic -- 0.1%
Coca-Cola Femsa SAB de CV
Company Guar. Notes
2.38% due 11/26/2018.................. 292,000 293,955
-----------
Beverages-Wine/Spirits -- 0.1%
Diageo Capital PLC
Company Guar. Notes
5.75% due 10/23/2017.................. 262,000 262,631
-----------
Principal Value
Security Description Amount** (Note 2)
Brewery -- 0.1%
Anheuser-Busch InBev SA/NV
Company Guar. Notes
2.75% due 03/17/2036......................... EUR 250,000 $ 321,418
----------
Building Societies -- 0.1%
Nationwide Building Society
Sub. Notes
2.00% due 07/25/2029......................... EUR 400,000 474,385
----------
Building-Residential/Commercial -- 0.2%
Mattamy Group Corp.
Senior Notes
6.50% due 10/01/2025*........................ 632,000 647,800
----------
Cable/Satellite TV -- 1.4%
Altice Financing SA
Senior Sec. Notes
7.50% due 05/15/2026*........................ 1,380,000 1,518,000
Altice Luxembourg SA
Company Guar. Notes
7.63% due 02/15/2025*........................ 965,000 1,040,994
Numericable-SFR SA
Senior Sec. Notes
7.38% due 05/01/2026*........................ 1,834,000 1,980,720
Ziggo Secured Finance BV
Senior Sec. Notes
5.50% due 01/15/2027*........................ 800,000 819,752
----------
5,359,466
----------
Cellular Telecom -- 0.4%
C&W Senior Financing Designated Activity Co.
Senior Notes
6.88% due 09/15/2027*........................ 667,000 693,680
Empresa Nacional de Telecomunicaciones SA
Senior Notes
4.88% due 10/30/2024......................... 200,000 209,362
GTH Finance BV
Company Guar. Notes
7.25% due 04/26/2023*........................ 200,000 226,888
VimpelCom Holdings BV
Company Guar. Notes
5.95% due 02/13/2023......................... 200,000 217,200
----------
1,347,130
----------
Chemicals-Diversified -- 0.5%
Israel Chemicals, Ltd.
Senior Notes
4.50% due 12/02/2024*........................ 200,000 206,500
LYB International Finance II BV
Company Guar. Notes
3.50% due 03/02/2027......................... 151,000 150,190
NOVA Chemicals Corp.
Senior Notes
5.00% due 05/01/2025*........................ 695,000 705,425
Trinseo Materials Operating SCA/Trinseo
Materials Finance, Inc.
Company Guar. Notes
5.38% due 09/01/2025*........................ 615,000 632,681
----------
1,694,796
----------
32
AIG Strategic Bond Fund
PORTFOLIO OF INVESTMENTS -- September 30, 2017 -- (unaudited)
(continued)
Principal Value
Security Description Amount** (Note 2)
FOREIGN CORPORATE BONDS & NOTES (continued)
Computers-Memory Devices -- 0.2%
Seagate HDD Cayman
Company Guar. Notes
4.75% due 01/01/2025.................. $ 955,000 $ 929,666
----------
Cruise Lines -- 0.3%
NCL Corp., Ltd.
Senior Notes
4.75% due 12/15/2021*................. 445,000 461,688
Silversea Cruise Finance, Ltd.
Senior Sec. Notes
7.25% due 02/01/2025*................. 730,000 781,100
----------
1,242,788
----------
Diversified Banking Institutions -- 2.0%
Barclays PLC
Sub. Notes
4.84% due 05/09/2028.................. 200,000 207,186
BNP Paribas SA
Senior Bonds
1.50% due 11/17/2025.................. EUR 425,000 509,243
BNP Paribas SA
Senior Notes
3.80% due 01/10/2024*................. 302,000 313,944
Credit Agricole SA
Senior Notes
1.88% due 12/20/2026.................. EUR 400,000 489,924
Credit Agricole SA
Senior Notes
4.13% due 01/10/2027*................. 262,000 273,842
Credit Suisse Group AG
Senior Notes
4.28% due 01/09/2028*................. 448,000 466,644
HSBC Holdings PLC
Sub. Notes
3.00% due 06/30/2025.................. EUR 300,000 392,598
HSBC Holdings PLC
Senior Notes
3.26% due 03/13/2023.................. 200,000 204,135
HSBC Holdings PLC
Senior Notes
4.04% due 03/13/2028.................. 201,000 209,860
Lloyds Banking Group PLC
Sub. Notes
4.58% due 12/10/2025.................. 336,000 353,057
Mitsubishi UFJ Financial Group, Inc.
Senior Notes
2.67% due 07/25/2022.................. 184,000 183,778
Mitsubishi UFJ Financial Group, Inc.
Senior Notes
2.95% due 03/01/2021.................. 314,000 319,026
Mizuho Financial Group, Inc.
Senior Notes
2.27% due 09/13/2021.................. 406,000 399,861
Royal Bank of Scotland Group PLC
Senior Notes
2.00% due 03/08/2023.................. EUR 525,000 648,431
Royal Bank of Scotland Group PLC
Senior Notes
3.88% due 09/12/2023.................. 201,000 205,680
Principal Value
Security Description Amount** (Note 2)
Diversified Banking Institutions (continued)
UBS AG
Sub. Notes
4.75% due 02/12/2026...................... EUR 350,000 $ 457,538
UBS Group Funding Switzerland AG
Company Guar. Bonds
1.25% due 09/01/2026...................... EUR 350,000 409,954
UniCredit SpA
Senior Notes
2.00% due 03/04/2023...................... EUR 425,000 531,882
UniCredit SpA
Sub. Notes
5.86% due 06/19/2032*..................... 236,000 247,315
UniCredit SpA
Sub. Notes
6.95% due 10/31/2022...................... EUR 300,000 433,369
----------
7,257,267
----------
Diversified Financial Services -- 0.1%
GE Capital International Funding Co. ULC
Company Guar. Notes
4.42% due 11/15/2035...................... 263,000 285,986
----------
Diversified Manufacturing Operations -- 0.1%
Siemens Financieringsmaatschappij NV
Company Guar. Notes
2.20% due 03/16/2020*..................... 400,000 404,046
----------
Diversified Minerals -- 0.2%
FMG Resources August 2006 Pty, Ltd.
Company Guar. Notes
4.75% due 05/15/2022*..................... 860,000 870,750
----------
Diversified Operations -- 0.1%
Grupo KUO SAB De CV
Senior Notes
5.75% due 07/07/2027*..................... 400,000 421,000
----------
E-Commerce/Products -- 0.1%
Alibaba Group Holding, Ltd.
Senior Notes
3.60% due 11/28/2024...................... 280,000 290,171
----------
Electric-Distribution -- 0.1%
State Grid Overseas Investment, Ltd.
Company Guar. Notes
4.13% due 05/07/2024*..................... 200,000 213,647
----------
Electric-Generation -- 0.1%
Comision Federal de Electricidad
Senior Notes
4.75% due 02/23/2027*..................... 200,000 210,500
Electricite de France SA
Senior Notes
2.35% due 10/13/2020*..................... 153,000 153,890
Electricite de France SA
Senior Notes
6.00% due 01/22/2114*..................... 127,000 141,535
----------
505,925
----------
Electric-Integrated -- 0.6%
EDP Finance BV
Senior Notes
2.00% due 04/22/2025...................... EUR 400,000 495,141
33
AIG Strategic Bond Fund
PORTFOLIO OF INVESTMENTS -- September 30, 2017 -- (unaudited)
(continued)
Principal Value
Security Description Amount** (Note 2)
FOREIGN CORPORATE BONDS & NOTES (continued)
Electric-Integrated (continued)
EDP Finance BV
Senior Notes
3.63% due 07/15/2024*............. $ 295,000 $ 297,422
Enel Finance International NV
Company Guar. Notes
1.97% due 01/27/2025.............. EUR 350,000 440,451
Enel Finance International NV
Company Guar. Notes
3.63% due 05/25/2027*............. 425,000 425,864
Enel Finance International NV
Company Guar. Notes
4.75% due 05/25/2047*............. 200,000 211,681
Pampa Energia SA
Senior Notes
7.50% due 01/24/2027*............. 360,000 391,259
----------
2,261,818
----------
Electronic Connectors -- 0.0%
Tyco Electronics Group SA
Company Guar. Notes
3.13% due 08/15/2027.............. 77,000 76,336
----------
Food-Meat Products -- 0.1%
Minerva Luxembourg SA
Company Guar. Notes
6.50% due 09/20/2026*............. 200,000 202,050
----------
Food-Misc./Diversified -- 0.1%
BRF GmbH
Company Guar. Notes
4.35% due 09/29/2026.............. 300,000 294,750
----------
Gambling (Non-Hotel) -- 0.2%
International Game Technology PLC
Senior Sec. Notes
6.50% due 02/15/2025*............. 570,000 640,538
----------
Gas-Distribution -- 0.1%
China Resources Gas Group, Ltd.
Senior Notes
4.50% due 04/05/2022.............. 350,000 371,463
----------
Gas-Transportation -- 0.1%
Transportadora de Gas del Peru SA
Senior Notes
4.25% due 04/30/2028.............. 200,000 207,000
----------
Gold Mining -- 0.1%
Goldcorp, Inc.
Senior Notes
5.45% due 06/09/2044.............. 80,000 89,833
Kinross Gold Corp.
Company Guar. Notes
4.50% due 07/15/2027*............. 211,000 212,846
Polyus Finance PLC
Company Guar. Notes
5.25% due 02/07/2023.............. 200,000 208,980
----------
511,659
----------
Insurance-Life/Health -- 0.0%
Manulife Financial Corp.
Sub. Notes
4.06% due 02/24/2032.............. 108,000 109,080
----------
Principal Value
Security Description Amount** (Note 2)
Insurance-Multi-line -- 0.1%
Willow No 2 Ireland PLC for Zurich
Insurance Co., Ltd.
Senior Sec. Notes
3.38% due 06/27/2022......................... $ 175,000 $ 235,987
----------
Insurance-Property/Casualty -- 0.0%
Enstar Group, Ltd.
Senior Notes
4.50% due 03/10/2022......................... 74,000 76,555
----------
Investment Companies -- 0.1%
Huarong Finance II Co., Ltd.
Company Guar. Notes
5.00% due 11/19/2025......................... 350,000 367,625
----------
Investment Management/Advisor Services -- 0.1%
China Cinda Finance 2015 I, Ltd.
Company Guar. Notes
4.25% due 04/23/2025*........................ 380,000 388,485
----------
Medical-Drugs -- 0.6%
Endo, Ltd./Endo Finance LLC/Endo Finco, Inc.
Company Guar. Notes
6.00% due 02/01/2025*........................ 275,000 222,750
Teva Pharmaceutical Finance
Netherlands II BV
Company Guar. Bonds
1.88% due 03/31/2027......................... EUR 150,000 166,683
Valeant Pharmaceuticals International, Inc.
Company Guar. Notes
5.88% due 05/15/2023*........................ 875,000 773,281
Valeant Pharmaceuticals International, Inc.
Senior Sec. Notes
7.00% due 03/15/2024*........................ 838,000 894,641
----------
2,057,355
----------
Medical-Generic Drugs -- 0.1%
Allergan Funding SCS
Company Guar. Notes
2.13% due 06/01/2029......................... EUR 250,000 301,679
----------
Metal-Copper -- 0.5%
First Quantum Minerals, Ltd.
Company Guar. Notes
7.25% due 04/01/2023*........................ 1,230,000 1,266,900
HudBay Minerals, Inc.
Company Guar. Notes
7.63% due 01/15/2025*........................ 487,000 527,187
----------
1,794,087
----------
Metal-Diversified -- 0.1%
Glencore Canada Financial Corp. Company
Guar. Notes
7.38% due 05/27/2020......................... GBP 100,000 153,923
Rio Tinto Finance USA, Ltd.
Company Guar. Notes
3.75% due 06/15/2025......................... 149,000 157,105
Vedanta Resources PLC
Senior Notes
6.38% due 07/30/2022*........................ 200,000 208,000
----------
519,028
----------
34
AIG Strategic Bond Fund
PORTFOLIO OF INVESTMENTS -- September 30, 2017 -- (unaudited)
(continued)
Principal Value
Security Description Amount** (Note 2)
FOREIGN CORPORATE BONDS & NOTES (continued)
Metal-Iron -- 0.2%
NLMK Group
Senior Notes
4.50% due 06/15/2023............ $ 200,000 $ 206,146
Vale Overseas, Ltd.
Company Guar. Notes
6.25% due 08/10/2026............ 165,000 187,225
Vale SA
Senior Notes
3.75% due 01/10/2023............ EUR 150,000 195,657
----------
589,028
----------
Oil & Gas Drilling -- 0.1%
Pacific Drilling SA
Senior Sec. Notes
5.38% due 06/01/2020*(15)....... 1,050,000 362,250
----------
Oil Companies-Exploration & Production -- 0.9%
Anadarko Finance Co.
Company Guar. Notes
7.50% due 05/01/2031............ 89,000 110,763
Empresa Nacional del Petroleo
Senior Notes
3.75% due 08/05/2026*........... 500,000 499,820
MEG Energy Corp.
Company Guar. Notes
6.38% due 01/30/2023*........... 1,659,000 1,447,477
MEG Energy Corp.
Sec. Notes
6.50% due 01/15/2025*........... 1,037,000 1,012,371
Tengizchevroil Finance Co.
International, Ltd.
Senior Sec. Notes
4.00% due 08/15/2026*........... 200,000 198,166
----------
3,268,597
----------
Oil Companies-Integrated -- 1.5%
BP Capital Markets PLC
Company Guar. Notes
1.38% due 11/06/2017............ 228,000 227,968
BP Capital Markets PLC
Company Guar. Notes
2.97% due 02/27/2026............ EUR 250,000 337,814
BP Capital Markets PLC
Company Guar. Notes
3.25% due 05/06/2022............ 103,000 106,698
Ecopetrol SA
Senior Notes
4.13% due 01/16/2025............ 200,000 200,500
Lukoil International Finance BV
Company Guar. Notes
4.75% due 11/02/2026*........... 200,000 210,540
Pertamina Persero PT
Senior Notes
4.88% due 05/03/2022*........... 300,000 321,708
Petrobras Global Finance BV
Company Guar. Notes
6.75% due 01/27/2041............ 290,000 288,550
Principal Value
Security Description Amount** (Note 2)
Oil Companies-Integrated (continued)
Petrobras Global Finance BV
Company Guar. Notes
7.38% due 01/17/2027.............. $ 150,000 $ 165,150
Petrobras Global Finance BV
Company Guar. Notes
8.75% due 05/23/2026.............. 155,000 186,194
Petroleos de Venezuela SA
Company Guar. Notes
6.00% due 05/16/2024(16).......... 950,000 288,800
Petroleos de Venezuela SA
Company Guar. Notes
6.00% due 11/15/2026(16).......... 2,000,000 607,000
Petroleos Mexicanos
Company Guar. Notes
5.50% due 06/27/2044.............. 119,000 110,967
Petroleos Mexicanos
Company Guar. Notes
6.75% due 09/21/2047*............. 207,000 220,227
Petroleos Mexicanos
Company Guar. Notes
6.75% due 09/21/2047.............. 1,024,000 1,089,433
Petronas Capital, Ltd.
Company Guar. Notes
3.50% due 03/18/2025.............. 275,000 283,395
Petronas Capital, Ltd.
Company Guar. Notes
5.25% due 08/12/2019.............. 450,000 474,630
Shell International Finance BV
Company Guar. Notes
1.25% due 11/10/2017.............. 152,000 151,966
Shell International Finance BV
Company Guar. Notes
2.13% due 05/11/2020.............. 166,000 167,021
Shell International Finance BV
Company Guar. Notes
2.25% due 11/10/2020.............. 176,000 177,282
----------
5,615,843
----------
Oil Refining & Marketing -- 0.3%
Cosan Luxembourg SA
Company Guar. Notes
7.00% due 01/20/2027*............. 550,000 596,090
Reliance Industries, Ltd.
Senior Notes
4.13% due 01/28/2025*............. 250,000 259,882
Thai Oil PCL
Senior Notes
3.63% due 01/23/2023*............. 200,000 205,154
----------
1,061,126
----------
Oil-Field Services -- 0.4%
KCA Deutag UK Finance PLC
Senior Sec. Notes
9.88% due 04/01/2022*............. 876,000 908,850
Trinidad Drilling, Ltd.
Company Guar. Notes
6.63% due 02/15/2025*............. 300,000 280,500
35
AIG Strategic Bond Fund
PORTFOLIO OF INVESTMENTS -- September 30, 2017 -- (unaudited)
(continued)
Principal Value
Security Description Amount** (Note 2)
FOREIGN CORPORATE BONDS & NOTES (continued)
Oil-Field Services (continued)
Weatherford International, Ltd.
Company Guar. Notes
9.88% due 02/15/2024*............... $ 450,000 $ 495,000
----------
1,684,350
----------
Paper & Related Products -- 0.3%
Cascades, Inc.
Company Guar. Notes
5.50% due 07/15/2022*............... 275,000 285,313
Cascades, Inc.
Company Guar. Notes
5.75% due 07/15/2023*............... 753,000 790,650
----------
1,075,963
----------
Petrochemicals -- 0.1%
Alpek SAB de CV
Company Guar. Notes
5.38% due 08/08/2023*............... 200,000 212,600
Equate Petrochemical BV
Company Guar. Notes
4.25% due 11/03/2026*............... 200,000 205,660
----------
418,260
----------
Printing-Commercial -- 0.4%
Cimpress NV
Company Guar. Notes
7.00% due 04/01/2022*............... 1,420,000 1,471,475
----------
Real Estate Investment Trusts -- 0.2%
Goodman Australia Finance Pty, Ltd.
Company Guar. Notes
1.38% due 09/27/2025*............... EUR 500,000 589,739
Trust F/1401
Senior Notes
5.25% due 01/30/2026*............... 200,000 213,500
----------
803,239
----------
Retail-Major Department Stores -- 0.2%
El Puerto de Liverpool SAB de CV
Company Guar. Notes
3.88% due 10/06/2026................ 380,000 380,000
El Puerto de Liverpool SAB de CV
Company Guar. Notes
3.88% due 10/06/2026*............... 200,000 200,000
----------
580,000
----------
Satellite Telecom -- 0.6%
Intelsat Jackson Holdings SA
Company Guar. Notes
5.50% due 08/01/2023................ 860,000 728,850
Intelsat Luxembourg SA
Company Guar. Notes
8.13% due 06/01/2023................ 795,000 496,875
Telesat Canada/Telesat LLC
Company Guar. Notes
8.88% due 11/15/2024*............... 841,000 947,176
----------
2,172,901
----------
Principal Value
Security Description Amount** (Note 2)
Semiconductor Equipment -- 0.1%
Sensata Technologies BV
Company Guar. Notes
4.88% due 10/15/2023*....................... $ 444,000 $ 466,755
----------
Special Purpose Entity -- 0.0%
Hellas Telecommunications Luxembourg II SCA
Sub. Notes
8.46% due 01/15/2015*+(3)(4)(5)(6).......... 1,330,000 0
----------
Steel-Producers -- 0.3%
ArcelorMittal
Senior Notes
6.13% due 06/01/2025........................ 870,000 1,000,500
Evraz Group SA
Senior Notes
5.38% due 03/20/2023*....................... 200,000 205,650
----------
1,206,150
----------
SupraNational Banks -- 0.2%
European Investment Bank
Senior Notes
1.63% due 08/14/2020........................ 384,000 382,271
North American Development Bank
Senior Notes
2.30% due 10/10/2018........................ 434,000 436,584
----------
818,855
----------
Telephone-Integrated -- 0.2%
Oi SA
Senior Notes
9.75% due 09/15/2016*+(4)(5)(6)............. BRL 575,000 50,834
Telecom Italia Capital SA
Company Guar. Notes
7.72% due 06/04/2038........................ 258,000 330,962
Telefonica Emisiones SAU
Company Guar. Notes
4.10% due 03/08/2027........................ 151,000 156,227
Telefonica Emisiones SAU
Company Guar. Notes
5.21% due 03/08/2047........................ 205,000 225,610
----------
763,633
----------
Transport-Marine -- 0.1%
PT Pelabuhan Indonesia II
Senior Notes
4.25% due 05/05/2025*....................... 300,000 308,094
----------
Transport-Rail -- 0.4%
Canadian Pacific Railway Co.
Senior Notes
6.13% due 09/15/2115........................ 115,000 146,293
Kazakhstan Temir Zholy Finance BV
Company Guar. Notes
6.95% due 07/10/2042........................ 1,200,000 1,341,216
----------
1,487,509
----------
36
AIG Strategic Bond Fund
PORTFOLIO OF INVESTMENTS -- September 30, 2017 -- (unaudited)
(continued)
Principal Value
Security Description Amount** (Note 2)
FOREIGN CORPORATE BONDS & NOTES (continued)
Transport-Services -- 0.1%
Transnet SOC, Ltd.
Senior Notes
4.00% due 07/26/2022............. $ 400,000 $ 393,560
-----------
Total Foreign Corporate Bonds & Notes
(cost $72,205,064)............... 72,160,229
-----------
FOREIGN GOVERNMENT OBLIGATIONS -- 15.8%
Banks-Export/Import -- 0.3%
Export Credit Bank of Turkey
Senior Notes
4.25% due 09/18/2022*............ 1,100,000 1,082,875
-----------
Banks-Special Purpose -- 0.3%
Brazilian Development Bank
Senior Notes
4.75% due 05/09/2024*............ 228,000 229,425
Corp Financiera de Desarrollo SA
Senior Notes
4.75% due 02/08/2022............. 500,000 535,000
Hungarian Development Bank
Government Guar. Notes
6.25% due 10/21/2020............. 400,000 441,407
-----------
1,205,832
-----------
Central Bank -- 0.3%
Central Bank of Tunisia
Senior Notes
5.75% due 01/30/2025............. 1,300,000 1,264,541
-----------
Sovereign -- 14.9%
Dominican Republic
Senior Bonds
5.50% due 01/27/2025*............ 415,000 438,863
Dominican Republic
Senior Bonds
5.88% due 04/18/2024............. 380,000 412,300
Dominican Republic
Senior Bonds
5.95% due 01/25/2027*............ 250,000 268,750
Dominican Republic
Senior Bonds
6.85% due 01/27/2045............. 750,000 839,062
Dominican Republic
Senior Bonds
7.45% due 04/30/2044............. 600,000 714,750
Dominican Republic
Senior Bonds
8.63% due 04/20/2027............. 350,000 426,125
Federal Republic of Germany
Bonds
2.50% due 08/15/2046............. EUR 355,000 546,368
Government of Egypt
Senior Notes
5.75% due 04/29/2020............. 380,000 393,452
Government of Egypt
Senior Notes
6.13% due 01/31/2022*............ 300,000 310,467
Government of Egypt
Senior Notes
6.88% due 04/30/2040............. 200,000 193,687
Principal Value
Security Description Amount** (Note 2)
Sovereign (continued)
Government of Egypt
Senior Notes
8.50% due 01/31/2047... $ 715,000 $ 796,623
Government of Jamaica
Senior Notes
6.75% due 04/28/2028... 200,000 230,500
Government of Jamaica
Senior Notes
8.00% due 03/15/2039... 1,000,000 1,237,500
Government of Romania
Senior Notes
6.13% due 01/22/2044... 780,000 990,748
Government of Ukraine
Senior Notes
7.38% due 09/25/2032*.. 1,000,000 973,750
Government of Ukraine
Senior Notes
7.75% due 09/01/2026... 700,000 720,279
Government of Ukraine
Senior Notes
7.75% due 09/01/2027... 150,000 153,840
Kingdom of Bahrain
Senior Bonds
7.50% due 09/20/2047*.. 565,000 552,502
Kingdom of Jordan
Senior Notes
5.75% due 01/31/2027... 400,000 392,231
Kingdom of Jordan
Senior Notes
5.75% due 01/31/2027*.. 450,000 441,260
Republic of Argentina
Senior Notes
5.63% due 01/26/2022... 640,000 672,000
Republic of Argentina
Senior Notes
6.88% due 04/22/2021... 650,000 708,500
Republic of Argentina
Senior Notes
7.63% due 04/22/2046... 479,000 531,690
Republic of Argentina
Senior Notes
8.28% due 12/31/2033... 280,408 325,273
Republic of Azerbaijan
Senior Notes
4.75% due 03/18/2024... 1,500,000 1,541,250
Republic of Belarus
Senior Bonds
7.63% due 06/29/2027*.. 450,000 502,256
Republic of Chile
Senior Notes
3.86% due 06/21/2047... 550,000 559,625
Republic of Colombia
Senior Notes
4.38% due 07/12/2021... 300,000 320,100
Republic of Colombia
Senior Bonds
7.38% due 09/18/2037... 400,000 527,600
37
AIG Strategic Bond Fund
PORTFOLIO OF INVESTMENTS -- September 30, 2017 -- (unaudited)
(continued)
Principal Value
Security Description Amount** (Note 2)
FOREIGN GOVERNMENT OBLIGATIONS (continued)
Sovereign (continued)
Republic of Colombia
Senior Notes
8.13% due 05/21/2024...... $ 500,000 $ 640,000
Republic of Costa Rica
Senior Bonds
7.16% due 03/12/2045...... 300,000 324,000
Republic of Ecuador
Senior Notes
9.65% due 12/13/2026*..... 700,000 738,500
Republic of El Salvador
Senior Bonds
8.63% due 02/28/2029*..... 350,000 392,875
Republic of Ghana
Senior Notes
8.13% due 01/18/2026...... 400,000 425,128
Republic of Guatemala
Senior Notes
4.38% due 06/05/2027*..... 460,000 455,400
Republic of Guatemala
Senior Notes
4.88% due 02/13/2028...... 800,000 818,000
Republic of Guatemala
Senior Notes
5.75% due 06/06/2022...... 740,000 802,900
Republic of Honduras
Senior Notes
6.25% due 01/19/2027...... 800,000 860,272
Republic of Hungary
Senior Notes
5.38% due 02/21/2023...... 500,000 563,910
Republic of Indonesia
Senior Notes
3.70% due 01/08/2022...... 700,000 726,383
Republic of Indonesia
Senior Notes
6.63% due 02/17/2037...... 400,000 509,360
Republic of Iraq
Senior Notes
6.75% due 03/09/2023*..... 500,000 496,502
Republic of Italy
Bonds
1.20% due 04/01/2022...... EUR 150,000 181,203
Republic of Italy
Bonds
4.75% due 09/01/2044...... EUR 120,000 179,696
Republic of Italy
Bonds
6.50% due 11/01/2027...... EUR 75,000 123,890
Republic of Ivory Coast
Senior Notes
6.13% due 06/15/2033*..... 1,600,000 1,571,475
Republic of Lebanon
Senior Notes
5.80% due 04/14/2020...... 390,000 390,612
Republic of Lebanon
Senior Notes
6.60% due 11/27/2026...... 900,000 882,918
Principal Value
Security Description Amount** (Note 2)
Sovereign (continued)
Republic of Lebanon
Senior Notes
6.65% due 04/22/2024..... $ 600,000 $ 600,516
Republic of Lebanon
Senior Notes
8.25% due 04/12/2021..... 840,000 905,856
Republic of Lithuania
Senior Notes
6.63% due 02/01/2022..... 500,000 586,250
Republic of Lithuania
Senior Notes
7.38% due 02/11/2020..... 550,000 617,186
Republic of Namibia
Senior Notes
5.25% due 10/29/2025..... 570,000 579,166
Republic of Panama
Senior Notes
3.75% due 03/16/2025..... 600,000 627,600
Republic of Paraguay
Senior Notes
6.10% due 08/11/2044..... 650,000 729,625
Republic of Peru
Senior Notes
5.63% due 11/18/2050..... 330,000 416,625
Republic of Peru
Senior Notes
6.55% due 03/14/2037..... 300,000 403,500
Republic of Peru
Senior Notes
8.75% due 11/21/2033..... 750,000 1,180,500
Republic of Poland
Senior Notes
3.00% due 03/17/2023..... 1,500,000 1,535,400
Republic of Poland
Senior Notes
5.13% due 04/21/2021..... 550,000 602,937
Republic of Serbia
Senior Notes
7.25% due 09/28/2021..... 1,000,000 1,154,500
Republic of South Africa
Senior Notes
4.67% due 01/17/2024..... 1,000,000 1,023,000
Republic of South Africa
Senior Notes
5.65% due 09/27/2047..... 220,000 218,662
Republic of South Africa
Senior Notes
6.25% due 03/08/2041..... 1,300,000 1,404,325
Republic of Sri Lanka
Senior Notes
6.25% due 10/04/2020..... 200,000 213,054
Republic of Sri Lanka
Senior Notes
6.83% due 07/18/2026*.... 265,000 291,014
Republic of Sri Lanka
Senior Notes
6.83% due 07/18/2026..... 900,000 988,350
38
AIG Strategic Bond Fund
PORTFOLIO OF INVESTMENTS -- September 30, 2017 -- (unaudited)
(continued)
Principal Value
Security Description Amount** (Note 2)
FOREIGN GOVERNMENT OBLIGATIONS (continued)
Sovereign (continued)
Republic of Sri Lanka
Senior Notes
6.85% due 11/03/2025*........ $ 400,000 $ 439,110
Republic of Sri Lanka
Senior Notes
6.85% due 11/03/2025......... 700,000 768,443
Republic of the Philippines
Senior Notes
4.00% due 01/15/2021......... 1,350,000 1,431,811
Republic of Turkey
Senior Notes
3.25% due 03/23/2023......... 400,000 380,309
Republic of Turkey
Senior Notes
5.75% due 05/11/2047......... 460,000 452,217
Republic of Turkey
Senior Notes
6.25% due 09/26/2022......... 300,000 329,049
Republic of Turkey
Senior Notes
7.25% due 03/05/2038......... 300,000 352,476
Republic of Turkey
Senior Notes
8.00% due 02/14/2034......... 750,000 933,225
Republic of Venezuela
Senior Notes
8.25% due 10/13/2024(16)..... 960,000 324,000
Republic of Venezuela
Senior Notes
9.25% due 05/07/2028(16)..... 650,000 222,755
Republic of Venezuela
Senior Notes
9.38% due 01/13/2034(16)..... 817,000 287,993
Russian Federation
Senior Notes
4.88% due 09/16/2023......... 800,000 871,168
Russian Federation
Bonds
5.00% due 04/29/2020......... 1,000,000 1,060,000
Russian Federation
Senior Bonds
5.25% due 06/23/2047*........ 800,000 817,322
United Kingdom Gilt Treasury
Bonds
3.50% due 01/22/2045......... GBP 400,000 711,877
United Kingdom Gilt Treasury
Bonds
4.50% due 09/07/2034......... GBP 380,000 711,608
United Mexican States
Senior Notes
4.13% due 01/21/2026......... 850,000 895,475
United Mexican States
Senior Notes
4.15% due 03/28/2027......... 205,000 215,465
United Mexican States
Senior Notes
4.35% due 01/15/2047......... 628,000 610,730
Principal Value
Security Description Amount** (Note 2)
Sovereign (continued)
United Mexican States
Senior Bonds
4.75% due 03/08/2044.................... $ 53,000 $ 54,617
United Mexican States
Senior Notes
6.05% due 01/11/2040.................... 900,000 1,080,000
-----------
54,832,091
-----------
Total Foreign Government Obligations
(cost $58,078,211)...................... 58,385,339
-----------
U.S. GOVERNMENT AGENCIES -- 8.4%
Federal Home Loan Mtg. Corp. -- 3.1%
2.50% due 01/01/2028.................... 247,071 250,570
2.50% due 04/01/2028.................... 82,289 83,429
2.50% due 03/01/2031.................... 133,839 134,904
3.00% due 07/01/2045.................... 2,366,911 2,377,404
3.00% due 10/01/2045.................... 807,824 811,531
3.50% due 03/01/2042.................... 338,455 350,821
3.50% due 04/01/2042.................... 338,979 351,362
3.50% due 09/01/2043.................... 327,159 339,779
3.50% due 07/01/2045.................... 3,266,896 3,380,096
4.00% due 01/01/2046.................... 395,589 419,990
4.50% due 02/01/2020.................... 2,654 2,713
4.50% due 08/01/2020.................... 9,558 9,772
4.50% due 03/01/2039.................... 1,529,928 1,659,356
4.50% due 12/01/2039.................... 7,670 8,355
5.00% due 02/01/2034.................... 22,866 25,091
5.00% due 05/01/2034.................... 33,371 36,931
5.00% due 11/01/2043.................... 236,450 259,332
5.50% due 05/01/2037.................... 55,418 61,628
6.00% due 03/01/2040.................... 44,897 50,965
6.50% due 02/01/2035.................... 10,433 11,564
Federal Home Loan Mtg. Corp. FRS
2.91% (6 ML+1.53%)
due 02/01/2037.......................... 18,684 19,330
3.60% (12 ML+1.89%)
due 11/01/2037.......................... 117,606 124,143
Federal Home Loan Mtg. Corp. REMIC FRS
Series 3572, Class JS
5.57% (6.80%-1ML)
due 09/15/2039(1)(7)(8)................. 505,101 67,173
Federal Home Loan Mtg. Corp. REMIC
Series 1103, Class N
11.50% due 06/15/2021(1)(7)............. 372 33
Federal Home Loan Mtg. Corp. Structured
Agency Credit Risk FRS
Series 2015-DNA1, Class M2
3.09% (1 ML+1.85%)
due 10/25/2027(1)....................... 200,000 204,317
Federal Home Loan Mtg. Corp. Structured
Agency Credit Risk FRS
Series 2014-DN1, Class M2
3.44% (1 ML+2.20%)
due 02/25/2024(1)....................... 65,548 67,653
Federal Home Loan Mtg. Corp. Structured
Agency Credit Risk FRS
Series 2015-HQ1, Class M2
3.44% (1 ML+2.20%)
due 03/25/2025(1)....................... 180,039 181,549
39
AIG Strategic Bond Fund
PORTFOLIO OF INVESTMENTS -- September 30, 2017 -- (unaudited)
(continued)
Principal Value
Security Description Amount** (Note 2)
U.S. GOVERNMENT AGENCIES (continued)
Federal Home Loan Mtg. Corp. (continued)
Federal Home Loan Mtg. Corp. Structured
Agency Credit Risk FRS
Series 2014-HQ3, Class M2
3.89% (1 ML+2.65%)
due 10/25/2024(1)....................... $ 101,472 $ 101,845
Federal Home Loan Mtg. Corp. Structured
Agency Credit Risk FRS
Series 2015-HQA1, Class M2
3.89% (1 ML+2.65%)
due 03/25/2028(1)....................... 257,277 262,920
-----------
11,654,556
-----------
Federal National Mtg. Assoc. -- 5.2%
Federal National Mtg. Assoc. FRS
2.97% (6 ML+1.54%)
due 09/01/2035.......................... 76,733 79,425
Federal National Mtg. Assoc. FRS
3.13% (1 Yr USTYCR+2.19%)
due 10/01/2035.......................... 96,482 101,786
Federal National Mtg. Assoc. FRS
3.13% (12 ML+1.82%)
due 10/01/2040.......................... 28,785 30,097
Federal National Mtg. Assoc. FRS
3.18% (1 Yr USTYCR+2.26%)
due 11/01/2036.......................... 48,443 51,105
Federal National Mtg. Assoc. FRS
3.21% (12 ML+1.57%)
due 05/01/2037.......................... 27,000 28,235
Federal National Mtg. Assoc. FRS
3.27% (12 ML+1.83%)
due 10/01/2040.......................... 50,838 53,325
Federal National Mtg. Assoc. FRS
3.34% (12 ML+1.77%)
due 05/01/2040.......................... 102,149 107,157
Federal National Mtg. Assoc. FRS
3.36% (12 ML+1.66%)
due 07/01/2039.......................... 76,036 80,096
Federal National Mtg. Assoc. FRS
3.60% (12 ML+1.91%)
due 08/01/2035.......................... 70,180 74,639
2.50% due 12/01/2026.................... 583,549 592,450
2.50% due 09/01/2027.................... 465,182 471,449
3.00% due 10/01/2027.................... 274,127 282,467
3.00% due 11/01/2027.................... 267,271 275,376
3.00% due 10/01/2030.................... 219,220 225,721
3.00% due 10/01/2032.................... 280,000 287,882
3.00% due 12/01/2042.................... 140,412 141,649
3.00% due 06/01/2045.................... 42,812 43,129
3.00% due October TBA................... 1,000,000 1,003,281
3.50% due 08/01/2026.................... 101,792 106,025
3.50% due 08/01/2027.................... 73,131 76,176
3.50% due 10/01/2028.................... 38,745 40,594
3.50% due October TBA................... 1,936,000 2,016,162
3.50% due 02/01/2043.................... 131,278 136,451
3.50% due 10/01/2045.................... 276,965 287,072
3.50% due 11/01/2045.................... 254,122 262,165
Principal Value
Security Description Amount** (Note 2)
Federal National Mtg. Assoc. (continued)
3.50% due 12/01/2045.................. $ 1,295,127 $ 1,336,118
3.50% due 03/01/2046.................. 2,854,137 2,944,472
3.50% due 07/01/2046.................. 176,216 182,543
4.00% due 11/01/2025.................. 164,308 172,695
4.00% due 10/01/2043.................. 338,829 361,195
4.00% due 02/01/2045.................. 1,975,839 2,104,771
4.00% due 06/01/2046.................. 1,315,849 1,386,023
4.00% due 05/01/2047.................. 684,005 720,523
4.50% due 06/01/2019.................. 9,989 10,216
4.50% due 11/01/2022.................. 33,051 34,088
4.50% due 06/01/2023.................. 18,471 19,460
4.50% due 08/01/2045.................. 2,056,776 2,257,635
4.50% due 04/01/2047.................. 468,857 503,473
5.00% due 06/01/2019.................. 8,024 8,212
5.00% due 01/01/2023.................. 10,030 10,376
5.00% due 03/01/2034.................. 22,345 24,619
5.00% due 05/01/2035.................. 12,414 13,675
5.00% due 05/01/2040.................. 91,534 100,099
5.00% due 07/01/2040.................. 92,262 100,779
5.50% due 06/01/2038.................. 28,318 31,597
6.00% due 02/01/2032.................. 4,868 5,476
6.00% due 05/01/2034.................. 1,970 2,251
6.00% due 10/01/2034.................. 19,875 22,357
7.50% due 01/01/2030.................. 1,203 1,232
8.00% due 11/01/2028.................. 3,574 3,996
Federal National Mtg. Assoc. REMIC
Series 1989-2, Class D
8.80% due 01/25/2019(1)............... 1,017 1,048
-----------
19,212,843
-----------
Tennessee Valley Authority -- 0.1%
1.75% due 10/15/2018.................. 238,000 238,798
-----------
Total U.S. Government Agencies
(cost $31,477,070).................... 31,106,197
-----------
U.S. GOVERNMENT TREASURIES -- 6.6%
United States Treasury Bonds -- 1.4%
2.25% due 08/15/2027.................. 1,500,000 1,489,805
2.50% due 05/15/2046.................. 1,745,000 1,621,487
3.00% due 02/15/2047.................. 285,000 293,160
3.00% due 05/15/2047.................. 1,550,000 1,594,926
-----------
4,999,378
-----------
United States Treasury Notes -- 5.2%
1.38% due 07/31/2019.................. 7,400,000 7,388,148
1.63% due 05/15/2026.................. 569,000 539,705
1.75% due 09/30/2022.................. 184,000 182,304
1.88% due 02/28/2022.................. 454,000 454,142
1.88% due 04/30/2022.................. 500,000 499,551
2.13% due 07/31/2024.................. 62,000 61,910
3.50% due 02/15/2018.................. 10,000,000 10,085,169
-----------
19,210,929
-----------
Total U.S. Government Treasuries
(cost $24,501,406).................... 24,210,307
-----------
40
AIG Strategic Bond Fund
PORTFOLIO OF INVESTMENTS -- September 30, 2017 -- (unaudited)
(continued)
Principal
Amount/ Value
Security Description Shares** (Note 2)
LOANS (11)(12)(13) -- 0.5%
E-Commerce/Services -- 0.3%
RentPath LLC FRS
2nd Lien
10.25% (1ML+9.00%)
due 12/17/2022........................ $1,062,906 $1,023,047
----------
Publishing-Books -- 0.2%
Houghton Mifflin Harcourt
Publishers, Inc. FRS
BTL-B
4.23% (1ML+3.00%)
due 05/29/2021........................ 676,539 651,169
----------
Total Loans
(cost $1,675,172)..................... 1,674,216
----------
COMMON STOCKS -- 0.1%
Television -- 0.1%
ION Media Networks, Inc.+(3)(4)
(cost $7)............................. 655 498,684
----------
PREFERRED SECURITIES -- 0.1%
Electric-Distribution -- 0.0%
Entergy Louisiana LLC
4.70%................................. 6,500 162,370
----------
Sovereign Agency -- 0.0%
Federal Home Loan Mtg. Corp.
Series Z
8.38%+................................ 7,375 50,371
----------
Telecom Services -- 0.1%
Qwest Corp.
6.13%................................. 7,725 195,984
----------
Total Preferred Securities
(cost $469,495)....................... 408,725
----------
PREFERRED SECURITIES/CAPITAL SECURITIES -- 2.0%
Banks-Commercial -- 0.1%
Rabobank Nederland
11.00% due 06/30/2019*(9)............. 152,000 171,760
----------
Banks-Super Regional -- 0.1%
SunTrust Banks, Inc.
5.05% due 06/15/2022(9)............... 269,000 275,052
Wells Fargo Capital X
5.95% due 12/01/2086.................. 120,000 135,000
----------
410,052
----------
Diversified Banking Institutions -- 0.4%
BAC Capital Trust XIII
Series F
4.00% due 10/20/2017(9)............... 575,000 507,437
HSBC Holdings PLC
6.00% due 05/22/2027(9)............... 273,000 285,531
JPMorgan Chase & Co.
Series U
6.13% due 04/30/2024(9)............... 386,000 425,083
Societe Generale SA
7.88% due 12/18/2023*(9).............. 356,000 395,783
----------
1,613,834
----------
Electric-Generation -- 0.1%
Electricite de France SA
4.25% due 01/29/2020(9)............... EUR 200,000 250,858
Value
Security Description Shares** (Note 2)
Electric-Generation (continued)
Electricite de France SA
5.38% due 01/29/2025(9).................... EUR 200,000 $264,732
--------
515,590
--------
Electric-Integrated -- 0.1%
Dominion Resources, Inc.
5.75% due 10/01/2054....................... 170,000 183,600
Southern Co.
Series B
5.50% due 03/15/2057....................... 130,000 137,497
--------
321,097
--------
Finance-Investment Banker/Broker -- 0.0%
Lehman Brothers Holdings Capital Trust VII
Escrow Security
0.00%+(3)(4)............................... 222,000 22
--------
Finance-Other Services -- 0.1%
National Rural Utilities Cooperative
Finance Corp.
4.75% due 04/30/2043....................... 293,000 304,183
--------
Food-Dairy Products -- 0.2%
Land O'Lakes Capital Trust I
7.45% due 03/15/2028*...................... 730,000 830,375
--------
Gas-Distribution -- 0.1%
Centrica PLC
3.00% due 04/10/2076....................... EUR 150,000 182,985
--------
Insurance-Life/Health -- 0.0%
Prudential Financial, Inc.
Jr. Sub. Notes
4.50% due 09/15/2047....................... 90,000 91,359
--------
Insurance-Multi-line -- 0.2%
MetLife, Inc.
6.40% due 12/15/2066....................... 287,000 330,767
Zurich Finance UK PLC
6.63% due 10/02/2022(9).................... GBP 150,000 238,374
--------
569,141
--------
Oil Companies-Integrated -- 0.1%
TOTAL SA
3.88% due 05/18/2022(9).................... EUR 285,000 368,885
--------
Pipelines -- 0.3%
Enbridge, Inc.
5.50% due 07/15/2077....................... 389,000 393,863
EnLink Midstream Partners LP
6.00% due 12/15/2022(9).................... 144,000 144,116
Enterprise Products Operating LLC
Company Guar. Notes
4.88% due 08/16/2077....................... 122,000 122,610
Enterprise Products Operating LLC
Company Guar. Notes
5.25% due 08/16/2077....................... 107,000 107,936
TransCanada Trust
5.30% due 03/15/2077....................... 107,000 109,541
TransCanada Trust
5.63% due 05/20/2075....................... 90,000 95,445
--------
973,511
--------
41
AIG Strategic Bond Fund
PORTFOLIO OF INVESTMENTS -- September 30, 2017 -- (unaudited)
(continued)
Principal
Amount/ Value
Security Description Shares** (Note 2)
PREFERRED SECURITIES/CAPITAL SECURITIES (continued)
Telephone-Integrated -- 0.0%
Orange SA
5.25% due 02/07/2024(9).................. EUR 125,000 $ 170,520
------------
Tools-Hand Held -- 0.1%
Stanley Black & Decker, Inc.
5.75% due 12/15/2053..................... 338,000 351,520
------------
Water -- 0.1%
Suez
3.00% due 06/23/2020(9).................. EUR 400,000 498,762
------------
Total Preferred Securities/Capital Securities
(cost $6,771,304)........................ 7,373,596
------------
Total Long-Term Investment Securities
(cost $359,027,185)...................... 363,608,350
------------
SHORT-TERM INVESTMENT SECURITIES -- 0.5%
Time Deposits -- 0.5%
Euro Time Deposit with State Street Bank
and Trust Co.
0.12% due 10/02/2017
(cost $2,031,000)........................ $ 2,031,000 2,031,000
------------
REPURCHASE AGREEMENTS -- 0.7%
Agreement with Fixed Income Clearing
Corp., bearing interest at 0.12%, dated
09/29/2017, to be repurchased
10/02/2017 in the amount of
$2,731,027 collateralized by $2,795,000
of United States Treasury Notes,
bearing interest at 2.25% due
02/15/2027 and having an approximate
value of $2,790,162
(cost $2,731,000)........................ 2,731,000 2,731,000
------------
TOTAL INVESTMENTS
(cost $363,789,185) (10)................. 99.8% 368,370,350
Other assets less liabilities............... 0.2 702,706
------------- ------------
NET ASSETS 100.0% $369,073,056
============= ============
--------
* Securities exempt from registration under Rule 144A of the Securities Act
of 1933. These securities may be sold in transactions exempt from
registration, normally to qualified institutional buyers. The Fund has no
right to demand registration of these securities. At September 30, 2017,
the aggregate value of these securities was $108,026,132 representing
29.3% of net assets. Unless otherwise indicated, these securities are not
considered to be illiquid.
** Denominated in United States Dollars unless otherwise indicated.
+ Non-income producing security
(1) Collateralized Mortgage Obligation
(2) Commercial Mortgage Backed Security
(3) Securities are classified as Level 3 (see Note 2).
(4) Illiquid security. At September 30, 2017, the aggregate value of these
securities was $556,679 representing 0.2% of net assets.
(5) Security in default of interest and principal at maturity.
(6) Company has filed for bankruptcy protection.
(7) Interest Only
(8) Inverse Floating Rate Security that pays interest that varies inversely to
changes in the market interest rates. The interest rate shown is the
current interest rate at September 30, 2017.
(9) Perpetual maturity - maturity date reflects the next call date.
(10) See Note 5 for cost of investments on a tax basis.
(11) Senior loans in the Fund are generally subject to mandatory and/or
optional prepayment. Because of these mandatory prepayment conditions and
because there may be significant economic incentives for a borrower to
prepay, prepayments may occur. As a result, the actual remaining maturity
may be substantially less than the stated maturities shown.
(12) The Fund invests in senior loans which generally pay interest at rates
which are periodically re-determined by reference to a base lending rate
plus a premium. These base lending rates are generally either the lending
rate offered by one or more major European banks, such as the London
Inter-Bank Offer Rate ("LIBOR") or the prime rate offered by one or more
major United States banks, or the certificate of deposit rate. Senior
loans are generally considered to be restrictive in that the Fund is
ordinarily contractually obligated to receive approval from the Agent Bank
and/or borrower prior to the disposition of a senior loan.
(13) All loans in the Fund were purchased through assignment agreements unless
otherwise indicated.
(14) Certain variable rate securities are not based on a published reference
rate and spread but are determined by these issues or agent and are based
on current market conditions. These securities do not indicate a reference
rate and spread in their description above.
(15) Subsequent to September 30, 2017, company has filed for bankruptcy
protection.
(16) Subsequent to September 30, 2017, security is in default of interest.
BTL --Bank Term Loan
REMIC --Real Estate Mortgage Investment Conduit
TBA --Securities purchased on a forward commitment basis with an approximate
principal amount and no definite maturity date. The actual principal
amount and maturity date will be determined upon settlement date.
ULC --Unlimited Liability Corp.
FRS --Floating Rate Security
VRS --Variable Rate Security
The rates shown on FRS and VRS are the current rates at September 30, 2017 and
unless noted otherwise, the dates shown are the original maturity dates.
Currency Legend
BRL --Brazilian Real
EUR --Euro Currency
GBP --British Pound
Index Legend
1 ML -- 1 Month USD LIBOR
1 Yr USTYCR -- 1 Year US Treasury Yield Curve Rate
12 ML -- 12 Month USD LIBOR
6 ML -- 6 Month USD LIBOR
42
AIG Strategic Bond Fund
PORTFOLIO OF INVESTMENTS -- September 30, 2017 -- (unaudited)
(continued)
Forward Foreign Currency Contracts
Contract In Exchange Delivery Unrealized Unrealized
Counterparty to Deliver For Date Appreciation Depreciation
--------------------------------------------------------------------------------------------
JPMorgan Chase Bank N.A EUR 10,087,000 USD 11,939,821 10/20/2017 $ 7,153 $ --
EUR 10,063,350 USD 12,046,212 11/16/2017 124,575 --
GBP 2,047,125 USD 2,684,006 10/20/2017 -- (60,674)
JPY 67,130,510 USD 607,769 10/20/2017 10,726 --
USD 679,411 EUR 565,000 10/20/2017 -- (11,030)
USD 596,134 JPY 67,130,510 10/20/2017 909 --
-------- --------
Net Unrealized Appreciation/(Depreciation)...... $143,363 $(71,704)
======== ========
--------
EUR --Euro Currency
GBP --Pound Sterling
JPY --Japanese Yen
USD --United States Dollar
The following is a summary of the inputs used to value the Fund's net assets as
of September 30, 2017 (see Note 2):
Level 1 -- Unadjusted Level 2 -- Other Level 3 -- Significant
Quoted Prices Observable Inputs Unobservable Inputs Total
- --------------------- ----------------- ---------------------- ------------
ASSETS:
Investments at Value:*
Asset Backed Securities.................. $ -- $ 22,482,469 $ -- $ 22,482,469
U.S. Corporate Bonds & Notes:
Airlines............................... -- 1,202,718 83,069 1,285,787
Finance-Investment Banker/Broker....... -- 977,934 64 977,998
Gambling (Non-Hotel)................... -- 1,295,113 7,075 1,302,188
Rubber/Plastic Products................ -- -- 0 0
Other Industries....................... -- 141,742,615 -- 141,742,615
Foreign Corporate Bonds & Notes:
Special Purpose Entity................. -- -- 0 0
Other Industries....................... -- 72,160,229 -- 72,160,229
Foreign Government Obligation............ -- 58,385,339 -- 58,385,339
U.S. Government Agencies................. -- 31,106,197 -- 31,106,197
U.S. Government Treasuries............... -- 24,210,307 -- 24,210,307
Loans.................................... 1,674,216 -- 1,674,216
Common Stocks............................ -- -- 498,684 498,684
Preferred Securities..................... 408,725 -- -- 408,725
Preferred Securities/Capital Securities:
Finance-Investment Banker/Broker....... -- -- 22 22
Other Industries....................... -- 7,373,574 -- 7,373,574
Short-Term Investment Securities......... -- 2,031,000 -- 2,031,000
Repurchase Agreements.................... -- 2,731,000 -- 2,731,000
-------- ------------ -------- ------------
Total Investments at Value............... $408,725 $367,372,711 $588,914 $368,370,350
======== ============ ======== ============
Other Financial Instruments:+
Forward Foreign Currency Contracts....... $ -- $ 143,363 $ -- $ 143,363
======== ============ ======== ============
LIABILITIES:
Other Financial Instruments:+
Forward Foreign Currency Contracts....... $ -- $ 71,704 $ -- $ 71,704
======== ============ ======== ============
--------
* For a detailed presentation of investments, please refer to the Portfolio of
Investments.
+ Other financial instruments are derivative instruments, not reflected in the
Portfolio of Investments, such as futures, forward, swap and written option
contracts, which are valued at the unrealized appreciation (depreciation) on
the instrument.
The Fund's policy is to recognize transfers between Levels as of the end of the
reporting period. There were no material transfers between Levels during the
reporting period.
At the beginning and end of the reporting period, Level 3 investments were not
considered a material portion of the Fund.
See Notes to Financial Statements
43
AIG Flexible Credit Fund
PORTFOLIO PROFILE -- September 30, 2017 -- (unaudited)
Industry Allocation*
Medical-Hospitals...................... 4.4%
Oil Companies-Exploration & Production. 4.2
Cable/Satellite TV..................... 3.9
Broadcast Services/Program............. 2.4
Chemicals-Specialty.................... 2.2
Casino Hotels.......................... 2.2
Building-Residential/Commercial........ 2.1
Auto/Truck Parts & Equipment-Original.. 2.1
Commercial Services.................... 2.1
Enterprise Software/Service............ 1.9
Real Estate Investment Trusts.......... 1.9
Telecom Services....................... 1.9
Containers-Metal/Glass................. 1.8
Medical-Drugs.......................... 1.7
Pipelines.............................. 1.6
Machinery-General Industrial........... 1.5
Gambling (Non-Hotel)................... 1.5
Aerospace/Defense-Equipment............ 1.4
Distribution/Wholesale................. 1.4
Chemicals-Diversified.................. 1.3
Building & Construction Products-Misc.. 1.3
Electric-Integrated.................... 1.2
Finance-Consumer Loans................. 1.2
Coal................................... 1.2
Finance-Mortgage Loan/Banker........... 1.1
Finance-Auto Loans..................... 1.0
Containers-Paper/Plastic............... 1.0
Independent Power Producers............ 1.0
Medical Products....................... 1.0
Oil & Gas Drilling..................... 1.0
Telephone-Integrated................... 1.0
Security Services...................... 0.9
Cellular Telecom....................... 0.9
Diagnostic Equipment................... 0.9
Oil-Field Services..................... 0.9
Oil Companies-Integrated............... 0.9
Building Products-Cement............... 0.9
Medical Labs & Testing Services........ 0.9
Schools................................ 0.8
Electric-Generation.................... 0.8
Data Processing/Management............. 0.8
Educational Software................... 0.8
Steel-Producers........................ 0.8
Non-Hazardous Waste Disposal........... 0.7
Computer Software...................... 0.7
Investment Companies................... 0.7
Food-Retail............................ 0.7
Dialysis Centers....................... 0.7
Human Resources........................ 0.7
Food-Meat Products..................... 0.6
Extended Service Contracts............. 0.6
Diversified Financial Services......... 0.6
Food-Misc./Diversified................. 0.6
Casino Services........................ 0.6
Diversified Banking Institutions....... 0.6
Computer Services...................... 0.6
Professional Sports.................... 0.6
Rubber/Plastic Products................ 0.6
Retail-Drug Store...................... 0.5
Medical-HMO............................ 0.5
Soap & Cleaning Preparation............ 0.5
Pharmacy Services...................... 0.5%
Metal-Aluminum......................... 0.5
Publishing-Books....................... 0.5
Auto-Heavy Duty Trucks................. 0.5
Sovereign.............................. 0.5
Investment Management/Advisor Services. 0.5
Metal-Diversified...................... 0.5
Retail-Propane Distribution............ 0.5
Cosmetics & Toiletries................. 0.5
Food-Flour & Grain..................... 0.4
Retail-Building Products............... 0.4
Television............................. 0.4
Advertising Services................... 0.4
Real Estate Management/Services........ 0.4
Gas-Distribution....................... 0.4
Metal-Iron............................. 0.4
Retail-Auto Parts...................... 0.4
Food-Dairy Products.................... 0.4
Disposable Medical Products............ 0.4
Diversified Minerals................... 0.4
Metal-Copper........................... 0.4
Bicycle Manufacturing.................. 0.4
Hotels/Motels.......................... 0.3
Computers-Integrated Systems........... 0.3
Machinery-Pumps........................ 0.3
Paper & Related Products............... 0.3
Theaters............................... 0.3
Retail-Sporting Goods.................. 0.3
Finance-Other Services................. 0.3
Auction Houses/Art Dealers............. 0.3
Radio.................................. 0.3
Banks-Super Regional................... 0.3
Private Equity......................... 0.3
Printing-Commercial.................... 0.3
Building & Construction-Misc........... 0.3
Cruise Lines........................... 0.3
Tools-Hand Held........................ 0.3
Food-Baking............................ 0.3
Machinery-Electrical................... 0.3
Retail-Restaurants..................... 0.3
Airlines............................... 0.3
Retail-Convenience Store............... 0.3
Insurance-Multi-line................... 0.3
Rental Auto/Equipment.................. 0.3
Retail-Bedding......................... 0.3
Internet Connectivity Services......... 0.3
Transport-Marine....................... 0.2
Retail-Pet Food & Supplies............. 0.2
Diversified Manufacturing Operations... 0.2
Retail-Misc./Diversified............... 0.2
Bloodstock Services.................... 0.2
Retail-Arts & Crafts................... 0.2
Retail-Automobile...................... 0.2
Athletic Equipment..................... 0.2
Transport-Services..................... 0.2
Machinery-Farming...................... 0.2
Energy-Alternate Sources............... 0.2
Building Products-Wood................. 0.2
Retail-Office Supplies................. 0.2
Chemicals-Other........................ 0.2
Electric Products-Misc................. 0.2
44
AIG Flexible Credit Fund
PORTFOLIO PROFILE -- September 30, 2017 -- (unaudited) (continued)
Industry Allocation* (continued)
Housewares........................... 0.2%
Banks-Commercial..................... 0.2
Coatings/Paint....................... 0.2
Water Treatment Systems.............. 0.2
Medical-Generic Drugs................ 0.2
Finance-Investment Banker/Broker..... 0.2
Financial Guarantee Insurance........ 0.2
Retail-Major Department Stores....... 0.2
Rubber-Tires......................... 0.2
Food-Confectionery................... 0.2
E-Commerce/Services.................. 0.1
Machinery-Construction & Mining...... 0.1
Medical-Nursing Homes................ 0.1
Metal Processors & Fabrication....... 0.1
Medical-Outpatient/Home Medical...... 0.1
Motion Pictures & Services........... 0.1
Real Estate Operations & Development. 0.1
Consumer Products-Misc............... 0.1
Registered Investment Companies...... 0.1
Filtration/Separation Products....... 0.1
Commercial Services & Supplies....... 0.1
Building-Heavy Construction.......... 0.1
Leisure Products..................... 0.1
Physicians Practice Management....... 0.1
Medical Information Systems.......... 0.1
Resorts/Theme Parks.................. 0.1
Transport-Air Freight................ 0.1
Research & Development............... 0.1
Retail-Toy Stores.................... 0.1
Medical-Biomedical/Gene.............. 0.1
Satellite Telecom.................... 0.1
-----
100.9%
=====
Credit Quality+#
Baa........ 0.4%
Ba......... 24.8
B.......... 53.0
Caa........ 14.0
Not Rated@. 7.8
-----
100.0%
=====
--------
*Calculated as a percentage of net assets.
+Source: Moody's
#Calculated as a percentage of total debt issues, excluding short-term
securities.
@Represents debt issues that either have no rating, or the rating is
unavailable from the data source.
45
AIG Flexible Credit Fund
PORTFOLIO OF INVESTMENTS -- September 30, 2017 -- (unaudited)
Principal Value
Security Description Amount (Note 2)
ASSET BACKED SECURITIES -- 0.2%
Diversified Financial Services -- 0.2%
Home Equity Loan Trust VRS
Series 2007-HSA3, Class AI4
6.11% due 06/25/2037(13)
(cost $811,335)........................ $ 823,429 $ 825,667
------------
U.S. CORPORATE BONDS & NOTES -- 40.0%
Aerospace/Defense-Equipment -- 0.4%
TransDigm, Inc.
Company Guar. Notes
6.50% due 05/15/2025................... 1,530,000 1,575,900
------------
Athletic Equipment -- 0.2%
Vista Outdoor, Inc.
Company Guar. Notes
5.88% due 10/01/2023................... 780,000 802,425
------------
Auction Houses/Art Dealers -- 0.1%
KAR Auction Services, Inc.
Company Guar. Notes
5.13% due 06/01/2025*.................. 345,000 358,800
------------
Auto-Heavy Duty Trucks -- 0.2%
Navistar International Corp.
Company Guar. Notes
8.25% due 11/01/2021................... 780,000 782,925
------------
Auto/Truck Parts & Equipment-Original -- 0.9%
Cooper-Standard Automotive, Inc.
Company Guar. Notes
5.63% due 11/15/2026*.................. 1,015,000 1,037,837
Tenneco, Inc.
Company Guar. Notes
5.00% due 07/15/2026................... 605,000 620,125
TI Group Automotive Systems, LLC
Company Guar. Notes
8.75% due 07/15/2023*.................. 1,650,000 1,749,000
------------
3,406,962
------------
Broadcast Services/Program -- 1.0%
Clear Channel Worldwide Holdings, Inc.
Company Guar. Notes
7.63% due 03/15/2020................... 1,495,000 1,476,312
iHeartCommunications, Inc.
Senior Sec. Notes
9.00% due 12/15/2019................... 1,075,000 811,625
Univision Communications, Inc.
Senior Sec. Notes
5.13% due 05/15/2023*.................. 1,195,000 1,218,900
------------
3,506,837
------------
Building & Construction Products-Misc. -- 0.6%
NCI Building Systems, Inc.
Company Guar. Notes
8.25% due 01/15/2023*.................. 1,000,000 1,072,500
Standard Industries, Inc.
Senior Notes
5.50% due 02/15/2023*.................. 385,000 407,619
Principal Value
Security Description Amount (Note 2)
Building & Construction Products-Misc. (continued)
Standard Industries, Inc.
Senior Notes
6.00% due 10/15/2025*....................... $ 690,000 $ 752,762
------------
2,232,881
------------
Building & Construction-Misc. -- 0.3%
Weekley Homes LLC/Weekley Finance Corp.
Senior Notes
6.63% due 08/15/2025*....................... 1,180,000 1,141,650
------------
Building Products-Cement -- 0.3%
CEMEX Finance LLC
Senior Sec. Notes
6.00% due 04/01/2024*....................... 920,000 977,509
------------
Building Products-Wood -- 0.2%
Boise Cascade Co.
Company Guar. Notes
5.63% due 09/01/2024*....................... 745,000 783,181
------------
Building-Heavy Construction -- 0.1%
New Enterprise Stone & Lime Co., Inc.
Senior Notes
10.13% due 04/01/2022*...................... 360,000 387,900
------------
Building-Residential/Commercial -- 2.1%
Beazer Homes USA, Inc.
Company Guar. Notes
5.75% due 06/15/2019........................ 310,000 325,500
Beazer Homes USA, Inc.
Senior Notes
5.88% due 10/15/2027*....................... 450,000 450,000
Beazer Homes USA, Inc.
Company Guar. Notes
6.75% due 03/15/2025........................ 690,000 726,639
CalAtlantic Group, Inc.
Company Guar. Notes
5.25% due 06/01/2026........................ 1,475,000 1,526,625
CalAtlantic Group, Inc.
Company Guar. Notes
5.88% due 11/15/2024........................ 159,000 173,707
M/I Homes, Inc.
Company Guar. Notes
5.63% due 08/01/2025*....................... 955,000 977,538
MDC Holdings, Inc.
Company Guar. Notes
5.50% due 01/15/2024........................ 830,000 894,076
PulteGroup, Inc.
Company Guar. Notes
5.50% due 03/01/2026........................ 675,000 736,020
TRI Pointe Group Inc./TRI Pointe Homes Inc.
Company Guar. Notes
5.88% due 06/15/2024........................ 1,930,000 2,065,100
------------
7,875,205
------------
Cable/Satellite TV -- 1.9%
Altice US Finance I Corp.
Senior Sec. Notes
5.38% due 07/15/2023*....................... 830,000 877,725
46
AIG Flexible Credit Fund
PORTFOLIO OF INVESTMENTS -- September 30, 2017 -- (unaudited)
(continued)
Principal Value
Security Description Amount (Note 2)
U.S. CORPORATE BONDS & NOTES (continued)
Cable/Satellite TV (continued)
Cablevision Systems Corp.
Senior Notes
5.88% due 09/15/2022........................ $1,965,000 $ 2,033,775
Cequel Communications Holdings I LLC/Cequel
Capital Corp.
Senior Notes
5.13% due 12/15/2021*....................... 570,000 579,975
CSC Holdings LLC
Senior Notes
5.25% due 06/01/2024........................ 595,000 601,694
DISH DBS Corp.
Company Guar. Notes
6.75% due 06/01/2021........................ 1,320,000 1,452,000
DISH DBS Corp.
Company Guar. Notes
7.75% due 07/01/2026........................ 530,000 608,530
Radiate Holdco LLC/Radiate Finance, Inc.
Senior Notes
6.63% due 02/15/2025*....................... 910,000 889,525
------------
7,043,224
------------
Casino Hotels -- 1.1%
Caesars Entertainment Resort Properties LLC
Senior Sec. Notes
8.00% due 10/01/2020........................ 265,000 270,963
Caesars Growth Properties Holdings LLC/
Caesars Growth Properties Finance, Inc.
Sec. Notes
9.38% due 05/01/2022........................ 840,000 903,000
CRC Escrow Issuer LLC/CRC Finco, Inc.
Company Guar. Notes
5.25% due 10/15/2025*....................... 1,320,000 1,320,000
MGM Resorts International
Company Guar. Notes
4.63% due 09/01/2026........................ 1,085,000 1,098,562
Station Casinos LLC
Company Guar. Notes
5.00% due 10/01/2025*....................... 310,000 310,744
------------
3,903,269
------------
Casino Services -- 0.2%
Eldorado Resorts, Inc.
Company Guar. Notes
6.00% due 04/01/2025........................ 655,000 687,750
------------
Cellular Telecom -- 0.9%
Sprint Corp.
Company Guar. Notes
7.88% due 09/15/2023........................ 1,370,000 1,589,200
Sprint Nextel Corp.
Senior Notes
6.00% due 11/15/2022........................ 985,000 1,054,462
T-Mobile USA, Inc.
Company Guar. Notes
6.38% due 03/01/2025........................ 320,000 344,544
T-Mobile USA, Inc.
Company Guar. Notes
6.50% due 01/15/2026........................ 315,000 347,681
------------
3,335,887
------------
Principal Value
Security Description Amount (Note 2)
Chemicals-Diversified -- 0.2%
Hexion, Inc.
Senior Sec. Notes
10.38% due 02/01/2022*...................... $ 560,000 $ 537,600
Hexion, Inc.
Sec. Notes
13.75% due 02/01/2022*...................... 400,000 328,000
------------
865,600
------------
Chemicals-Specialty -- 0.5%
Kraton Polymers LLC/Kraton Polymers Capital
Corp.
Company Guar. Notes
7.00% due 04/15/2025*....................... 865,000 927,712
Valvoline, Inc.
Company Guar. Notes
4.38% due 08/15/2025*....................... 1,060,000 1,079,875
------------
2,007,587
------------
Coal -- 0.7%
Alliance Resource Operating Partners LP/
Alliance Resource Finance Corp.
Company Guar. Notes
7.50% due 05/01/2025*....................... 1,107,000 1,148,512
Peabody Energy Corp.
Senior Sec. Notes
6.00% due 03/31/2022*....................... 1,210,000 1,249,325
------------
2,397,837
------------
Commercial Services -- 0.2%
ServiceMaster Co. LLC
Company Guar. Notes
5.13% due 11/15/2024*....................... 695,000 714,113
------------
Computer Software -- 0.4%
Rackspace Hosting, Inc.
Company Guar. Notes
8.63% due 11/15/2024*....................... 1,430,000 1,525,953
------------
Containers-Metal/Glass -- 0.3%
BWAY Holding Co.
Senior Notes
7.25% due 04/15/2025*....................... 75,000 77,250
Owens-Brockway Glass Container, Inc.
Company Guar. Notes
6.38% due 08/15/2025*....................... 750,000 848,438
------------
925,688
------------
Containers-Paper/Plastic -- 0.1%
Flex Acquisition Co, Inc.
Senior Notes
6.88% due 01/15/2025*....................... 485,000 503,491
------------
Data Processing/Management -- 0.2%
First Data Corp.
Senior Sec. Notes
5.00% due 01/15/2024*....................... 685,000 711,236
------------
Diagnostic Equipment -- 0.3%
Avantor, Inc.
Senior Sec. Notes
6.00% due 10/01/2024*....................... 500,000 512,500
47
AIG Flexible Credit Fund
PORTFOLIO OF INVESTMENTS -- September 30, 2017 -- (unaudited)
(continued)
Principal Value
Security Description Amount (Note 2)
U.S. CORPORATE BONDS & NOTES (continued)
Diagnostic Equipment (continued)
Ortho-Clinical Diagnostics, Inc.
Senior Notes
6.63% due 05/15/2022*....................... $ 635,000 $ 622,300
------------
1,134,800
------------
Dialysis Centers -- 0.2%
DaVita HealthCare Partners, Inc.
Company Guar. Notes
5.13% due 07/15/2024........................ 720,000 721,800
------------
Disposable Medical Products -- 0.2%
Sterigenics-Nordion Holdings LLC
Senior Notes
6.50% due 05/15/2023*....................... 720,000 748,800
------------
Educational Software -- 0.1%
Blackboard, Inc.
Sec. Notes
9.75% due 10/15/2021*....................... 365,000 325,763
------------
Electric Products-Misc. -- 0.2%
GrafTech International, Ltd.
Company Guar. Notes
6.38% due 11/15/2020........................ 780,000 758,550
------------
Electric-Integrated -- 0.2%
AES Corp.
Senior Notes
5.13% due 09/01/2027........................ 655,000 671,375
Texas Competitive Electric Holdings Co. LLC/
TCEH Finance, Inc.
Escrow Notes
11.50% due 10/01/2020+(2)................... 1,667,835 8,339
------------
679,714
------------
Energy-Alternate Sources -- 0.2%
TerraForm Power Operating LLC
Company Guar. Notes
6.38% due 02/01/2023*....................... 760,000 790,400
------------
Enterprise Software/Service -- 0.2%
BMC Software Finance, Inc.
Senior Notes
8.13% due 07/15/2021*....................... 765,000 783,169
------------
Finance-Auto Loans -- 0.7%
Ally Financial, Inc.
Senior Notes
4.13% due 03/30/2020........................ 1,910,000 1,967,300
Ally Financial, Inc.
Sub. Notes
5.75% due 11/20/2025........................ 700,000 758,940
------------
2,726,240
------------
Finance-Consumer Loans -- 1.2%
Navient Corp.
Senior Notes
6.50% due 06/15/2022........................ 962,000 1,020,317
Navient Corp.
Senior Notes
6.75% due 06/25/2025........................ 820,000 852,800
Principal Value
Security Description Amount (Note 2)
Finance-Consumer Loans (continued)
Navient Corp.
Senior Notes
7.25% due 09/25/2023......................... $ 205,000 $ 222,681
Springleaf Finance Corp.
Company Guar. Notes
5.25% due 12/15/2019......................... 1,390,000 1,446,990
Springleaf Finance Corp.
Company Guar. Notes
6.13% due 05/15/2022......................... 760,000 804,878
------------
4,347,666
------------
Finance-Investment Banker/Broker -- 0.2%
LPL Holdings, Inc.
Company Guar. Notes
5.75% due 09/15/2025*........................ 645,000 668,672
------------
Finance-Mortgage Loan/Banker -- 0.4%
Ladder Capital Finance Holdings LLLP/Ladder
Capital Finance Corp.
Senior Notes
5.25% due 03/15/2022*........................ 420,000 428,400
Ladder Capital Finance Holdings LLLP/Ladder
Capital Finance Corp.
Company Guar. Notes
5.88% due 08/01/2021*........................ 1,045,000 1,068,512
------------
1,496,912
------------
Finance-Other Services -- 0.3%
CSTN Merger Sub, Inc.
Senior Sec. Notes
6.75% due 08/15/2024*........................ 800,000 798,000
Nationstar Mtg. LLC/Nationstar Capital Corp.
Company Guar. Notes
6.50% due 07/01/2021......................... 415,000 423,300
------------
1,221,300
------------
Food-Flour & Grain -- 0.4%
Post Holdings, Inc.
Company Guar. Notes
5.00% due 08/15/2026*........................ 650,000 648,375
Post Holdings, Inc.
Company Guar. Notes
5.50% due 03/01/2025*........................ 490,000 508,375
Post Holdings, Inc.
Company Guar. Notes
5.75% due 03/01/2027*........................ 475,000 489,250
------------
1,646,000
------------
Food-Misc./Diversified -- 0.4%
Dole Food Co., Inc.
Senior Sec. Notes
7.25% due 06/15/2025*........................ 1,400,000 1,513,750
------------
Food-Retail -- 0.4%
Albertsons Cos. LLC/Safeway, Inc./New
Albertson's, Inc./Albertson's LLC
Company Guar. Notes
5.75% due 03/15/2025......................... 785,000 690,800
48
AIG Flexible Credit Fund
PORTFOLIO OF INVESTMENTS -- September 30, 2017 -- (unaudited)
(continued)
Principal Value
Security Description Amount (Note 2)
U.S. CORPORATE BONDS & NOTES (continued)
Food-Retail (continued)
Safeway, Inc.
Senior Notes
7.25% due 02/01/2031............................ $ 760,000 $ 653,600
------------
1,344,400
------------
Gambling (Non-Hotel) -- 0.6%
Pinnacle Entertainment, Inc.
Senior Notes
5.63% due 05/01/2024............................ 935,000 956,037
Scientific Games International, Inc.
Company Guar. Notes
6.63% due 05/15/2021............................ 495,000 507,375
Scientific Games International, Inc.
Senior Sec. Notes
7.00% due 01/01/2022*........................... 690,000 732,263
------------
2,195,675
------------
Gas-Distribution -- 0.4%
AmeriGas Partners LP/AmeriGas Finance Corp.
Senior Notes
5.50% due 05/20/2025............................ 505,000 518,888
NGL Energy Partners LP/NGL Energy Finance Corp.
Company Guar. Notes
5.13% due 07/15/2019............................ 935,000 935,000
------------
1,453,888
------------
Human Resources -- 0.3%
Team Health Holdings, Inc.
Company Guar. Notes
6.38% due 02/01/2025*........................... 975,000 923,813
------------
Independent Power Producers -- 1.0%
Calpine Corp.
Senior Notes
5.38% due 01/15/2023............................ 1,487,000 1,448,189
Dynegy, Inc.
Company Guar. Notes
7.38% due 11/01/2022............................ 1,580,000 1,645,175
NRG Energy, Inc.
Company Guar. Notes
7.25% due 05/15/2026............................ 630,000 675,675
------------
3,769,039
------------
Insurance-Multi-line -- 0.1%
Genworth Holdings, Inc.
Company Guar. Notes
4.90% due 08/15/2023............................ 400,000 342,000
------------
Internet Connectivity Services -- 0.3%
Zayo Group LLC/Zayo Capital, Inc.
Company Guar. Notes
5.75% due 01/15/2027*........................... 185,000 196,100
Zayo Group LLC/Zayo Capital, Inc.
Company Guar. Notes
6.38% due 05/15/2025............................ 670,000 722,012
------------
918,112
------------
Principal Value
Security Description Amount (Note 2)
Machinery-Electrical -- 0.3%
Vertiv Intermediate Holding Corp.
Senior Notes
12.00% due 02/15/2022*(3)................... $ 930,000 $ 1,046,250
------------
Medical Information Systems -- 0.1%
Change Healthcare Holdings LLC/Change
Healthcare Finance, Inc.
Senior Bonds
5.75% due 03/01/2025*....................... 345,000 351,900
------------
Medical Labs & Testing Services -- 0.5%
Eagle Holding Co. II LLC
Senior Notes
7.63% due 05/15/2022*(3).................... 740,000 767,750
West Street Merger Sub, Inc.
Senior Notes
6.38% due 09/01/2025*....................... 920,000 915,400
------------
1,683,150
------------
Medical Products -- 0.4%
DJO Finco, Inc./DJO Finance LLC/DJO Finance
Corp.
Sec. Notes
8.13% due 06/15/2021*....................... 785,000 751,637
Hill-Rom Holdings, Inc.
Company Guar. Notes
5.00% due 02/15/2025*....................... 760,000 786,600
------------
1,538,237
------------
Medical-Drugs -- 0.4%
Endo Finance LLC/Endo Finco, Inc.
Company Guar. Notes
5.38% due 01/15/2023*....................... 460,000 374,900
PRA Holdings, Inc.
Senior Notes
9.50% due 10/01/2023*....................... 421,000 458,890
Valeant Pharmaceuticals International, Inc.
Company Guar. Notes
6.38% due 10/15/2020*....................... 505,000 506,262
Valeant Pharmaceuticals International, Inc.
Company Guar. Notes
7.25% due 07/15/2022*....................... 295,000 287,625
------------
1,627,677
------------
Medical-HMO -- 0.4%
MPH Acquisition Holdings LLC
Company Guar. Notes
7.13% due 06/01/2024*....................... 1,000,000 1,075,000
WellCare Health Plans, Inc.
Senior Notes
5.25% due 04/01/2025........................ 525,000 552,562
------------
1,627,562
------------
Medical-Hospitals -- 2.7%
CHS/Community Health Systems, Inc.
Senior Sec. Notes
6.25% due 03/31/2023........................ 1,070,000 1,051,275
49
AIG Flexible Credit Fund
PORTFOLIO OF INVESTMENTS -- September 30, 2017 -- (unaudited)
(continued)
Principal Value
Security Description Amount (Note 2)
U.S. CORPORATE BONDS & NOTES (continued)
Medical-Hospitals (continued)
CHS/Community Health Systems, Inc.
Company Guar. Notes
6.88% due 02/01/2022..................... $ 730,000 $ 573,050
Envision Healthcare Corp.
Company Guar. Notes
6.25% due 12/01/2024*.................... 345,000 370,013
HCA, Inc.
Senior Sec. Notes
4.50% due 02/15/2027..................... 380,000 388,550
HCA, Inc.
Senior Sec. Notes
5.25% due 06/15/2026..................... 705,000 759,637
HCA, Inc.
Company Guar. Notes
5.38% due 02/01/2025..................... 1,595,000 1,680,731
IASIS Healthcare LLC/IASIS Capital Corp.
Company Guar. Notes
8.38% due 05/15/2019..................... 615,000 617,383
Surgery Center Holdings, Inc.
Company Guar. Notes
6.75% due 07/01/2025*.................... 140,000 131,600
Surgery Center Holdings, Inc.
Company Guar. Notes
8.88% due 04/15/2021*.................... 420,000 441,000
Tenet Healthcare Corp.
Senior Sec. Notes
6.00% due 10/01/2020..................... 750,000 799,282
Tenet Healthcare Corp.
Senior Notes
8.13% due 04/01/2022..................... 355,000 361,213
THC Escrow Corp. III
Sec. Notes
5.13% due 05/01/2025*.................... 635,000 626,269
THC Escrow Corp. III
Senior Notes
7.00% due 08/01/2025*.................... 2,090,000 1,964,600
------------
9,764,603
------------
Medical-Nursing Homes -- 0.1%
Kindred Healthcare, Inc.
Company Guar. Notes
8.00% due 01/15/2020..................... 515,000 505,828
------------
Metal Processors & Fabrication -- 0.1%
Hillman Group, Inc.
Company Guar. Notes
6.38% due 07/15/2022*.................... 490,000 487,550
------------
Metal-Aluminum -- 0.2%
Aleris International, Inc.
Senior Sec. Notes
9.50% due 04/01/2021*.................... 763,000 812,595
------------
Metal-Copper -- 0.4%
Freeport-McMoRan Copper & Gold, Inc.
Company Guar. Notes
3.55% due 03/01/2022..................... 445,000 438,187
Principal Value
Security Description Amount (Note 2)
Metal-Copper (continued)
Freeport-McMoRan Copper & Gold, Inc.
Company Guar. Notes
3.88% due 03/15/2023............................ $ 965,000 $ 950,525
------------
1,388,712
------------
Non-Hazardous Waste Disposal -- 0.4%
Advanced Disposal Services, Inc.
Company Guar. Notes
5.63% due 11/15/2024*........................... 660,000 689,700
Wrangler Buyer Corp.
Senior Notes
6.00% due 10/01/2025*........................... 693,000 705,128
------------
1,394,828
------------
Oil & Gas Drilling -- 0.2%
Rowan Cos., Inc.
Company Guar. Notes
5.40% due 12/01/2042............................ 870,000 661,200
------------
Oil Companies-Exploration & Production -- 2.6%
Alta Mesa Holdings LP/Alta Mesa Finance
Services Corp.
Company Guar. Notes
7.88% due 12/15/2024*........................... 910,000 982,800
Antero Resources Corp.
Company Guar. Notes
5.38% due 11/01/2021............................ 130,000 133,413
Antero Resources Corp.
Company Guar. Notes
5.63% due 06/01/2023............................ 190,000 198,075
Carrizo Oil & Gas, Inc.
Company Guar. Notes
6.25% due 04/15/2023............................ 1,125,000 1,141,875
Chesapeake Energy Corp.
Company Guar. Notes
8.00% due 06/15/2027*........................... 1,780,000 1,762,200
Continental Resources, Inc.
Company Guar. Notes
4.50% due 04/15/2023............................ 420,000 421,050
Denbury Resources, Inc.
Company Guar. Notes
5.50% due 05/01/2022............................ 655,000 374,169
EP Energy LLC/Everest Acquisition Finance, Inc.
Senior Sec. Notes
8.00% due 11/29/2024*........................... 410,000 414,100
EP Energy LLC/Everest Acquisition Finance, Inc.
Sec. Bonds
8.00% due 02/15/2025*........................... 270,000 210,262
EP Energy LLC/Everest Acquisition Finance, Inc.
Company Guar. Notes
9.38% due 05/01/2020............................ 479,000 398,767
Matador Resources Co.
Company Guar. Notes
6.88% due 04/15/2023............................ 535,000 566,431
Oasis Petroleum, Inc.
Company Guar. Notes
6.88% due 01/15/2023............................ 940,000 954,100
50
AIG Flexible Credit Fund
PORTFOLIO OF INVESTMENTS -- September 30, 2017 -- (unaudited)
(continued)
Principal Value
Security Description Amount (Note 2)
U.S. CORPORATE BONDS & NOTES (continued)
Oil Companies-Exploration & Production (continued)
RSP Permian, Inc.
Company Guar. Notes
5.25% due 01/15/2025*....................... $1,005,000 $ 1,020,075
Tapstone Energy LLC/Tapstone Energy Finance
Corp.
Senior Notes
9.75% due 06/01/2022*....................... 710,000 633,675
Ultra Resources, Inc.
Company Guar. Notes
6.88% due 04/15/2022*....................... 44,000 44,880
Ultra Resources, Inc.
Company Guar. Notes
7.13% due 04/15/2025*....................... 221,000 223,210
------------
9,479,082
------------
Oil-Field Services -- 0.4%
FTS International, Inc. FRS
Senior Sec. Notes
8.82% (3 ML+7.50%)
due 06/15/2020*............................. 475,000 482,719
SESI LLC
Company Guar. Notes
7.75% due 09/15/2024*....................... 980,000 1,014,300
------------
1,497,019
------------
Physicians Practice Management -- 0.1%
MEDNAX, Inc.
Company Guar. Notes
5.25% due 12/01/2023*....................... 355,000 371,863
------------
Pipelines -- 1.6%
American Midstream Partners LP/American
Midstream Finance Corp.
Company Guar. Notes
8.50% due 12/15/2021*....................... 685,000 707,262
Blue Racer Midstream LLC/Blue Racer Finance
Corp.
Company Guar. Notes
6.13% due 11/15/2022*....................... 875,000 907,812
Cheniere Corpus Christi Holdings LLC
Senior Sec. Notes
5.88% due 03/31/2025........................ 1,815,000 1,953,394
Crestwood Midstream Partners LP/Crestwood
Midstream Finance Corp.
Company Guar. Notes
5.75% due 04/01/2025........................ 415,000 423,819
Crestwood Midstream Partners LP/Crestwood
Midstream Finance Corp.
Company Guar. Notes
6.25% due 04/01/2023........................ 600,000 618,750
Energy Transfer Equity LP
Senior Sec. Notes
7.50% due 10/15/2020........................ 571,000 643,089
NuStar Logistics LP
Company Guar. Notes
5.63% due 04/28/2027........................ 725,000 764,875
------------
6,019,001
------------
Principal Value
Security Description Amount (Note 2)
Private Equity -- 0.3%
Icahn Enterprises LP/Icahn Enterprises Finance
Corp.
Company Guar. Notes
5.88% due 02/01/2022........................... $1,120,000 $ 1,153,600
------------
Publishing-Books -- 0.3%
McGraw-Hill Global Education Holdings LLC/
McGraw-Hill Global Education Finance
Senior Notes
7.88% due 05/15/2024*.......................... 1,025,000 1,010,906
------------
Radio -- 0.2%
Sirius XM Radio, Inc.
Company Guar. Notes
5.38% due 07/15/2026*.......................... 835,000 878,838
------------
Real Estate Investment Trusts -- 1.7%
Corrections Corp. of America
Company Guar. Notes
5.00% due 10/15/2022........................... 615,000 639,600
ESH Hospitality, Inc.
Company Guar. Notes
5.25% due 05/01/2025*.......................... 780,000 806,325
iStar Financial, Inc.
Senior Notes
5.00% due 07/01/2019........................... 715,000 724,384
iStar, Inc.
Senior Notes
5.25% due 09/15/2022........................... 595,000 603,925
iStar, Inc.
Senior Notes
6.00% due 04/01/2022........................... 730,000 755,550
MGM Growth Properties Operating Partnership
LP/MGP Finance Co-Issuer, Inc.
Senior Notes
4.50% due 01/15/2028*.......................... 645,000 650,676
MGM Growth Properties Operating Partnership
LP/MGP Finance Co-Issuer, Inc.
Company Guar. Notes
5.63% due 05/01/2024........................... 280,000 303,403
MPT Operating Partnership LP/MPT Finance
Corp.
Company Guar. Notes
5.00% due 10/15/2027........................... 590,000 604,750
MPT Operating Partnership LP/MPT Finance
Corp.
Company Guar. Notes
6.38% due 03/01/2024........................... 315,000 339,806
Uniti Group, Inc./CSL Capital LLC
Company Guar. Notes
7.13% due 12/15/2024*.......................... 1,065,000 902,588
------------
6,331,007
------------
Rental Auto/Equipment -- 0.3%
United Rentals North America, Inc.
Company Guar. Notes
5.50% due 07/15/2025........................... 895,000 958,769
------------
51
AIG Flexible Credit Fund
PORTFOLIO OF INVESTMENTS -- September 30, 2017 -- (unaudited)
(continued)
Principal Value
Security Description Amount (Note 2)
U.S. CORPORATE BONDS & NOTES (continued)
Resort/Theme Parks -- 0.1%
Six Flags Entertainment Corp.
Company Guar. Notes
4.88% due 07/31/2024*...................... $ 330,000 $ 335,775
------------
Retail-Automobile -- 0.2%
Sonic Automotive, Inc.
Company Guar. Notes
6.13% due 03/15/2027....................... 800,000 820,000
------------
Retail-Convenience Store -- 0.3%
Cumberland Farms, Inc.
Senior Notes
6.75% due 05/01/2025*...................... 925,000 983,090
------------
Retail-Drug Store -- 0.4%
Rite Aid Corp.
Company Guar. Notes
6.13% due 04/01/2023*...................... 1,135,000 1,102,369
Rite Aid Corp.
Company Guar. Notes
6.75% due 06/15/2021....................... 395,000 408,706
------------
1,511,075
------------
Retail-Pet Food & Supplies -- 0.1%
PetSmart, Inc.
Senior Sec. Notes
5.88% due 06/01/2025*...................... 95,000 82,888
PetSmart, Inc.
Company Guar. Notes
7.13% due 03/15/2023*...................... 460,000 358,708
------------
441,596
------------
Retail-Propane Distribution -- 0.5%
Ferrellgas LP/Ferrellgas Finance Corp.
Company Guar. Notes
6.75% due 06/15/2023....................... 585,000 564,525
Ferrellgas Partners LP/Ferrellgas Partners
Finance Corp.
Senior Notes
8.63% due 06/15/2020....................... 570,000 541,500
Suburban Propane Partners LP/Suburban
Energy Finance Corp.
Senior Notes
5.50% due 06/01/2024....................... 555,000 557,775
------------
1,663,800
------------
Retail-Restaurants -- 0.3%
Golden Nugget, Inc.
Senior Notes
6.75% due 10/15/2024*...................... 1,005,000 1,016,306
------------
Rubber-Tires -- 0.2%
Goodyear Tire & Rubber Co.
Company Guar. Notes
4.88% due 03/15/2027....................... 550,000 566,214
------------
Rubber/Plastic Products -- 0.0%
Venture Holdings Co. LLC
Company Guar. Notes
11.00% due 06/01/2007+(2)(4)(5)(6)......... 550,000 0
------------
Principal Value
Security Description Amount (Note 2)
Schools -- 0.1%
Laureate Education, Inc.
Company Guar. Notes
8.25% due 05/01/2025*...................... $ 390,000 $ 420,225
------------
Security Services -- 0.7%
ADT Corp.
Senior Sec. Notes
6.25% due 10/15/2021....................... 845,000 938,901
Altegrity, Inc.
Senior Sec. Notes
9.50% due 07/01/2019*...................... 865,000 919,062
Prime Security Services Borrower LLC/Prime
Finance, Inc.
Sec. Notes
9.25% due 05/15/2023*...................... 785,000 866,295
------------
2,724,258
------------
Soap & Cleaning Preparation -- 0.2%
Kronos Acquisition Holdings, Inc.
Company Guar. Notes
9.00% due 08/15/2023*...................... 940,000 916,500
------------
Steel-Producers -- 0.4%
AK Steel Corp.
Company Guar. Notes
7.00% due 03/15/2027....................... 745,000 758,969
AK Steel Corp.
Senior Sec. Notes
7.50% due 07/15/2023....................... 495,000 538,312
------------
1,297,281
------------
Telecom Services -- 0.1%
Qwest Corp.
Senior Notes
7.25% due 09/15/2025....................... 415,000 459,200
------------
Telephone-Integrated -- 1.0%
CenturyLink, Inc.
Senior Notes
7.50% due 04/01/2024....................... 650,000 672,887
Frontier Communications Corp.
Senior Notes
6.25% due 09/15/2021....................... 495,000 406,989
Frontier Communications Corp.
Senior Notes
10.50% due 09/15/2022...................... 2,095,000 1,817,412
Level 3 Financing, Inc.
Company Guar. Notes
5.25% due 03/15/2026....................... 580,000 594,320
------------
3,491,608
------------
Television -- 0.1%
Sinclair Television Group, Inc.
Company Guar. Notes
5.13% due 02/15/2027*...................... 300,000 291,375
------------
Water Treatment Systems -- 0.2%
CD&R Waterworks Merger Sub LLC
Senior Notes
6.13% due 08/15/2025*...................... 660,000 677,325
------------
52
AIG Flexible Credit Fund
PORTFOLIO OF INVESTMENTS -- September 30, 2017 -- (unaudited)
(continued)
Principal Value
Security Description Amount (Note 2)
U.S. CORPORATE BONDS & NOTES (continued)
Wireless Equipment -- 0.0%
ViaSat, Inc.
Senior Notes
5.63% due 09/15/2025*................. $ 60,000 $ 60,378
------------
Total U.S. Corporate Bonds & Notes
(cost $145,145,917)................... 147,230,456
------------
FOREIGN CORPORATE BONDS & NOTES -- 10.0%
Airlines -- 0.3%
Latam Finance, Ltd.
Company Guar. Notes
6.88% due 04/11/2024*................. 945,000 999,337
------------
Auto/Truck Parts & Equipment-Original -- 0.1%
Dana Financing Luxembourg SARL
Company Guar. Notes
5.75% due 04/15/2025*................. 180,000 189,788
Dana Financing Luxembourg SARL
Company Guar. Notes
6.50% due 06/01/2026*................. 185,000 199,800
------------
389,588
------------
Cable/Satellite TV -- 1.6%
Altice Luxembourg SA
Company Guar. Notes
7.63% due 02/15/2025*................. 1,390,000 1,499,462
Numericable-SFR SA
Senior Sec. Notes
6.00% due 05/15/2022*................. 1,200,000 1,254,000
Numericable-SFR SA
Senior Sec. Notes
7.38% due 05/01/2026*................. 1,410,000 1,522,800
UPCB Finance IV, Ltd.
Senior Sec. Notes
5.38% due 01/15/2025*................. 360,000 374,400
Virgin Media Finance PLC
Company Guar. Notes
6.00% due 10/15/2024*................. 400,000 420,500
Ziggo Secured Finance BV
Senior Sec. Notes
5.50% due 01/15/2027*................. 750,000 768,518
------------
5,839,680
------------
Casino Services -- 0.3%
Gateway Casinos & Entertainment, Ltd.
Sec. Notes
8.25% due 03/01/2024*................. 940,000 987,000
------------
Chemicals-Diversified -- 0.6%
INEOS Group Holdings SA
Company Guar. Notes
5.63% due 08/01/2024*................. 955,000 992,006
NOVA Chemicals Corp.
Senior Notes
4.88% due 06/01/2024*................. 510,000 516,375
NOVA Chemicals Corp.
Senior Notes
5.00% due 05/01/2025*................. 830,000 842,450
------------
2,350,831
------------
Principal Value
Security Description Amount (Note 2)
Chemicals-Specialty -- 0.2%
Alpha 3 BV/Alpha US Bidco, Inc.
Company Guar. Notes
6.25% due 02/01/2025*........................ $ 280,000 $ 284,900
Tronox Finance PLC
Company Guar. Notes
5.75% due 10/01/2025*........................ 225,000 230,625
Venator Finance SARL/Venator Materials Corp.
Company Guar. Notes
5.75% due 07/15/2025*........................ 275,000 286,000
------------
801,525
------------
Containers-Metal/Glass -- 0.5%
Ardagh Packaging Finance PLC/Ardagh
Holdings USA, Inc.
Company Guar. Notes
6.00% due 06/30/2021*........................ 365,000 375,038
Ardagh Packaging Finance PLC/Ardagh
Holdings USA, Inc.
Company Guar. Notes
6.00% due 02/15/2025*........................ 1,320,000 1,397,550
Ardagh Packaging Finance PLC/Ardagh
Holdings USA, Inc.
Company Guar. Notes
7.25% due 05/15/2024*........................ 260,000 285,186
------------
2,057,774
------------
Cruise Lines -- 0.3%
Viking Cruises, Ltd.
Company Guar. Notes
5.88% due 09/15/2027*........................ 1,115,000 1,118,847
------------
Diversified Manufacturing Operations -- 0.2%
Bombardier, Inc.
Senior Notes
8.75% due 12/01/2021*........................ 850,000 911,200
------------
Diversified Minerals -- 0.4%
Anglo American Capital PLC
Company Guar. Notes
3.63% due 09/11/2024*........................ 1,125,000 1,122,192
Teck Resources, Ltd.
Company Guar. Notes
8.50% due 06/01/2024*........................ 240,000 275,400
------------
1,397,592
------------
Food-Meat Products -- 0.2%
MARB BondCo PLC
Company Guar. Notes
7.00% due 03/15/2024*........................ 740,000 728,900
------------
Gambling (Non-Hotel) -- 0.3%
International Game Technology PLC
Senior Sec. Notes
6.25% due 02/15/2022*........................ 900,000 994,950
------------
Machinery-Farming -- 0.2%
CNH Industrial NV
Senior Notes
4.50% due 08/15/2023......................... 750,000 794,250
------------
53
AIG Flexible Credit Fund
PORTFOLIO OF INVESTMENTS -- September 30, 2017 -- (unaudited)
(continued)
Principal Value
Security Description Amount (Note 2)
FOREIGN CORPORATE BONDS & NOTES (continued)
Medical Products -- 0.1%
Mallinckrodt International Finance SA/
Mallinckrodt CB LLC
Company Guar. Notes
5.63% due 10/15/2023*....................... $ 465,000 $ 434,194
------------
Medical-Biomedical/Gene -- 0.1%
Concordia International Corp.
Senior Sec. Notes
9.00% due 04/01/2022*....................... 245,000 191,100
------------
Medical-Drugs -- 0.2%
Valeant Pharmaceuticals International, Inc.
Company Guar. Notes
6.13% due 04/15/2025*....................... 815,000 714,144
Valeant Pharmaceuticals International, Inc.
Senior Sec. Notes
7.00% due 03/15/2024*....................... 185,000 197,504
------------
911,648
------------
Metal-Aluminum -- 0.3%
Rusal Capital DAC
Company Guar. Notes
5.13% due 02/02/2022*....................... 1,100,000 1,119,077
------------
Metal-Diversified -- 0.5%
Vedanta Resources PLC
Senior Notes
6.13% due 08/09/2024*....................... 380,000 385,622
Vedanta Resources PLC
Senior Notes
6.38% due 07/30/2022*....................... 405,000 421,200
Vedanta Resources PLC
Senior Notes
8.25% due 06/07/2021*....................... 800,000 896,000
------------
1,702,822
------------
Metal-Iron -- 0.4%
Vale Overseas, Ltd.
Company Guar. Notes
5.88% due 06/10/2021........................ 460,000 505,770
Vale Overseas, Ltd.
Company Guar. Notes
6.25% due 08/10/2026........................ 820,000 930,454
------------
1,436,224
------------
Oil & Gas Drilling -- 0.2%
Transocean, Inc.
Company Guar. Notes
6.80% due 03/15/2038........................ 520,000 423,800
Transocean, Inc.
Company Guar. Notes
9.00% due 07/15/2023*....................... 300,000 323,250
------------
747,050
------------
Oil Companies-Exploration & Production -- 0.7%
Geopark, Ltd.
Senior Sec. Notes
6.50% due 09/21/2024*....................... 935,000 937,337
Principal Value
Security Description Amount (Note 2)
Oil Companies-Exploration & Production (continued)
MEG Energy Corp.
Sec. Notes
6.50% due 01/15/2025*......................... $ 725,000 $ 707,781
Seven Generations Energy, Ltd.
Company Guar. Notes
5.38% due 09/30/2025*......................... 895,000 901,713
------------
2,546,831
------------
Oil Companies-Integrated -- 0.9%
Petrobras Global Finance BV
Company Guar. Notes
5.30% due 01/27/2025*......................... 411,000 410,384
Petrobras Global Finance BV
Company Guar. Notes
6.00% due 01/27/2028*......................... 753,000 752,435
Petrobras Global Finance BV
Company Guar. Notes
7.38% due 01/17/2027.......................... 355,000 390,855
YPF SA
Senior Notes
6.95% due 07/21/2027*......................... 1,550,000 1,643,000
------------
3,196,674
------------
Oil-Field Services -- 0.2%
Weatherford International, Ltd.
Company Guar. Notes
8.25% due 06/15/2023.......................... 485,000 499,550
Weatherford International, Ltd.
Company Guar. Notes
9.88% due 02/15/2024*......................... 140,000 154,000
------------
653,550
------------
Paper & Related Products -- 0.3%
Cascades, Inc.
Company Guar. Notes
5.50% due 07/15/2022*......................... 675,000 700,312
Cascades, Inc.
Company Guar. Notes
5.75% due 07/15/2023*......................... 530,000 556,500
------------
1,256,812
------------
Satellite Telecom -- 0.1%
Intelsat Jackson Holdings SA
Senior Sec. Notes
8.00% due 02/15/2024*......................... 175,000 188,125
------------
Special Purpose Entity -- 0.0%
Hellas Telecommunications Luxembourg II SCA
Sub. Notes
6.26% due 01/15/2015+*(2)(4)(5)(6)............ 1,025,000 0
------------
Steel-Producers -- 0.4%
ArcelorMittal
Senior Notes
6.13% due 06/01/2025.......................... 745,000 856,750
BlueScope Steel Finance, Ltd./BlueScope Steel
Finance USA LLC
Company Guar. Notes
6.50% due 05/15/2021*......................... 490,000 513,177
------------
1,369,927
------------
54
AIG Flexible Credit Fund
PORTFOLIO OF INVESTMENTS -- September 30, 2017 -- (unaudited)
(continued)
Principal Value
Security Description Amount (Note 2)
FOREIGN CORPORATE BONDS & NOTES (continued)
Transport-Marine -- 0.2%
Topaz Marine SA
Senior Notes
9.13% due 07/26/2022*................. $ 940,000 $ 940,705
------------
Transport-Services -- 0.2%
JSL Europe SA
Company Guar. Notes
7.75% due 07/26/2024*................. 755,000 794,638
------------
Total Foreign Corporate Bonds & Notes
(cost $36,404,368).................... 36,860,851
------------
LOANS(7)(8)(9) -- 48.4%
Advertising Services -- 0.4%
Advantage Sales & Marketing, Inc. FRS
1st Lien
4.49% (1 ML+3.25%)
due 07/23/2021........................ 362,192 341,479
Advantage Sales & Marketing, Inc. FRS
BTL-B2
4.56% (3 ML+3.25%)
due 07/25/2021........................ 603,488 568,976
Advantage Sales & Marketing, Inc. FRS
2nd Lien
7.74% (1 ML+6.50%)
due 07/25/2022........................ 758,000 657,565
------------
1,568,020
------------
Aerospace/Defense-Equipment -- 1.0%
Accudyne Industries LLC FRS
BTL
5.01% (2 ML+3.75%)
due 08/02/2024........................ 1,180,000 1,182,029
TransDigm, Inc. FRS
BTL-D
4.24% (1 ML+3.00%)
due 06/04/2021........................ 87,833 88,012
TransDigm, Inc. FRS
BTL-F
4.24% (1 ML+3.00%)
due 06/09/2023........................ 305,723 306,392
TransDigm, Inc. FRS
BTL-G
4.24% (1 ML+3.00%)
due 08/22/2024........................ 493,775 494,461
TransDigm, Inc. FRS
BTL-D
4.33% (3 ML+3.00%)
due 06/04/2021........................ 1,367,054 1,369,830
TransDigm, Inc. FRS
BTL-F
4.33% (3 ML+3.00%)
due 06/09/2023........................ 164,631 164,991
TransDigm, Inc. FRS
BTL-G
4.33% (3 ML+3.00%)
due 08/22/2024........................ 139,637 139,831
------------
3,745,546
------------
Principal Value
Security Description Amount (Note 2)
Auction Houses/Art Dealers -- 0.2%
KAR Auction Services, Inc. FRS
BTL-B5
3.88% (3 ML+2.50%)
due 03/09/2023...................... $ 846,772 $ 850,742
------------
Auto-Heavy Duty Trucks -- 0.3%
Navistar, Inc. FRS
BTL-B
5.24% (1 ML+4.00%)
due 08/07/2020...................... 1,014,673 1,021,437
------------
Auto/Truck Parts & Equipment-Original -- 1.1%
Accuride Corp. FRS
BTL
8.33% (3 ML+7.00%)
due 10/21/2023...................... 1,087,024 1,103,329
Federal-Mogul Holdings Corp. FRS
BTL-C
4.98%-4.99% (1 ML+3.75%)
due 04/15/2021...................... 2,071,675 2,079,875
TI Group Automotive Systems LLC FRS
BTL-B
3.99% (1 ML+2.75%)
due 06/30/2022...................... 694,820 695,689
------------
3,878,893
------------
Bicycle Manufacturing -- 0.4%
SRAM LLC FRS
BTL-B
4.52% (2 ML+3.25%)
due 03/15/2024...................... 1,323,515 1,325,169
SRAM LLC FRS
BTL-B
6.50% (USFRBPLR+2.25%)
due 03/15/2024...................... 40,674 40,724
------------
1,365,893
------------
Bloodstock Services -- 0.2%
NVA Holdings, Inc. FRS
BTL-B2
4.83% (3 ML+3.50%)
due 08/14/2021...................... 370,630 373,062
NVA Holdings, Inc. FRS
2nd Lien
8.33% (3 ML+7.00%)
due 08/14/2022...................... 482,382 485,397
------------
858,459
------------
Broadcast Services/Program -- 1.4%
iHeartCommunications, Inc. FRS
BTL-D-EXT
8.08% (3 ML+6.75%)
due 01/30/2019...................... 1,555,000 1,194,240
Nexstar Broadcasting, Inc. FRS
BTL-B2
3.74% (1 ML+2.50%)
due 01/17/2024...................... 527,542 528,669
55
AIG Flexible Credit Fund
PORTFOLIO OF INVESTMENTS -- September 30, 2017 -- (unaudited)
(continued)
Principal Value
Security Description Amount (Note 2)
LOANS (continued)
Broadcast Services/Program (continued)
Univision Communications, Inc. FRS
BTL
3.99% (1 ML+2.75%)
due 03/15/2024.............................. $3,339,813 $ 3,307,934
------------
5,030,843
------------
Building & Construction Products-Misc. -- 0.7%
CPG International, Inc. FRS
BTL
5.08% (3 ML+3.75%)
due 05/03/2024.............................. 1,491,285 1,493,616
Summit Materials Co. I LLC FRS
BTL-B
3.99% (1 ML+2.75%)
due 07/17/2022.............................. 1,029,308 1,036,598
------------
2,530,214
------------
Building Products-Cement -- 0.6%
Quikrete Holdings, Inc. FRS
BTL-B
3.99% (1 ML+2.75%)
due 11/15/2023.............................. 2,138,837 2,135,050
------------
Building-Residential/Commercial -- 0.0%
TOUSA, Inc.
Escrow Loans
12.25% due 08/15/2011+(2)(4)................ 2,037,810 0
------------
Cable/Satellite TV -- 0.4%
Radiate Holdco LLC FRS
BTL
4.24% (1 ML+3.00%)
due 02/01/2024.............................. 926,771 913,448
Virgin Media Bristol LLC FRS
BTL
3.98% (1 ML+2.75%)
due 01/31/2025.............................. 405,000 406,456
------------
1,319,904
------------
Casino Hotels -- 1.1%
Caesars Entertainment Operating Co., Inc.
BTL-B5
1.50% due 03/01/2022(2)(5).................. 260,000 308,317
Caesars Entertainment Resort Properties LLC
FRS
BTL-B
4.74% (1 ML+3.50%)
due 10/11/2020.............................. 992,115 993,728
CBAC Borrower LLC FRS
BTL-B
5.24% (1 ML+4.00%)
due 06/28/2024.............................. 710,000 713,328
CityCenter Holdings LLC FRS
BTL-B
3.74% (1 ML+2.50%)
due 04/18/2024.............................. 1,311,713 1,316,016
Golden Nugget, Inc. FRS
BTL
coupon TBD
due 10/04/2023.............................. 630,000 632,992
------------
3,964,381
------------
Principal Value
Security Description Amount (Note 2)
Casino Services -- 0.1%
Gateway Casinos & Entertainment, Ltd. FRS
BTL-B1
5.08% (3 ML+3.75%)
due 02/22/2023............................ $ 513,713 $ 516,281
------------
Chemicals-Diversified -- 0.5%
INEOS US Finance LLC FRS
BTL-B
3.99% (1 ML+2.75%)
due 03/31/2022............................ 1,191,040 1,196,549
INEOS US Finance LLC FRS
BTL-B
3.99% (1 ML+2.75%)
due 04/01/2024............................ 312,638 313,984
New Arclin US Holding Corp. FRS
1st Lien
5.58% (3 ML+4.25%)
due 02/14/2024............................ 428,925 432,142
------------
1,942,675
------------
Chemicals-Other -- 0.2%
Zep, Inc. FRS
BTL
5.24% (1 ML+4.00%)
due 08/12/2024............................ 765,000 766,913
------------
Chemicals-Specialty -- 1.5%
Alpha 3 BV/Alpha US Bidco, Inc. FRS
BTL-B1
4.33% (3 ML+3.00%)
due 01/31/2024............................ 468,825 470,193
Huntsman International LLC FRS
BTL-B
4.24% (1 ML+3.00%)
due 04/01/2023............................ 365,138 366,622
KMG Chemicals, Inc. FRS
BTL-B
5.49% (1 ML+4.25%)
due 06/15/2024............................ 332,582 337,363
Kraton Polymers LLC FRS
BTL
4.24% (1 ML+3.00%)
due 01/06/2022............................ 352,113 356,048
MacDermid, Inc. FRS
BTL-B5
4.74% (1 ML+3.50%)
due 06/07/2020............................ 522,719 524,679
MacDermid, Inc. FRS
BTL-B7
coupon TBD
due 06/07/2020............................ 175,000 175,394
Omnova Solutions, Inc. FRS
BTL-B
5.49% (1 ML+4.25%)
due 08/28/2023............................ 1,562,220 1,571,984
PQ Corp. FRS
BTL-B
5.56% (3 ML+4.25%)
due 11/04/2022............................ 300,966 303,545
56
AIG Flexible Credit Fund
PORTFOLIO OF INVESTMENTS -- September 30, 2017 -- (unaudited)
(continued)
Principal Value
Security Description Amount (Note 2)
LOANS (continued)
Chemicals-Specialty (continued)
Tronox Blocked Brower LLC
Blocked Dollar
coupon TBD
due 09/14/2024................ $ 110,349 $ 110,676
Tronox Finance LLC
Initial Dollar
coupon TBD
due 09/14/2024................ 254,651 255,407
Venator Materials Corp. FRS
BTL-B
4.31% (3 ML+3.00%)
due 08/08/2024................ 1,010,000 1,013,787
------------
5,485,698
------------
Coal -- 0.5%
Blackhawk Mining LLC FRS
1st Lien
10.78% (2 ML+9.50%)
due 02/14/2022................ 770,873 704,707
Contura Energy, Inc. FRS
BTL
6.28% (2 ML+5.00%)
due 03/18/2024................ 1,110,650 1,092,602
------------
1,797,309
------------
Coatings/Paint -- 0.2%
Royal Holdings, Inc. FRS
1st Lien
4.58% (3 ML+3.25%)
due 06/19/2022................ 683,407 686,311
------------
Commercial Services -- 1.9%
Brand Energy & Infrastructure
Services, Inc. FRS
1st Lien
5.51% (2 ML+4.25%)
due 06/21/2024................ 1,245,646 1,250,600
Brand Energy & Infrastructure
Services, Inc. FRS
1st Lien
5.56%-5.58% (3 ML+4.25%)
due 06/21/2024................ 245,617 246,593
Brickman Group, Ltd. FRS
BTL-B
4.23%-4.24% (1 ML+3.00%)
due 12/18/2020................ 1,346,682 1,351,100
Brickman Group, Ltd. FRS
2nd Lien
7.73% (1 ML+6.50%)
due 12/17/2021................ 363,234 363,972
CPI Acquisition, Inc. FRS
BTL-B
5.96% (3 ML+4.50%)
due 08/17/2022................ 2,470,685 1,618,299
PAE Holding Corp. FRS
BTL-B
6.74% (1 ML+5.50%)
due 10/20/2022................ 548,698 550,070
Principal Value
Security Description Amount (Note 2)
Commercial Services (continued)
ServiceMaster Co. LLC FRS
BTL-B
3.74% (1 ML+2.50%)
due 11/08/2023............................... $1,418,464 $ 1,422,305
------------
6,802,939
------------
Commercial Services & Supplies -- 0.1%
Element Materials Tech Group FRS
BTL-B
4.83% (3 ML+3.50%)
due 06/28/2024............................... 386,282 388,922
------------
Computer Services -- 0.6%
Presidio LLC FRS
1st Lien
4.55% (3 ML+3.25%)
due 02/02/2022............................... 506,560 508,821
Science Applications International Corp. FRS
BTL-B
3.81% (3 ML+2.50%)
due 09/26/2018............................... 548,235 550,977
Tempo Acquisition LLC FRS
BTL-B
4.24% (1 ML+3.00%)
due 05/01/2024............................... 982,538 982,742
------------
2,042,540
------------
Computer Software -- 0.3%
Rackspace Hosting, Inc. FRS
BTL-B
4.31% (3 ML+3.00%)
due 11/03/2023............................... 1,094,507 1,091,967
------------
Computers-Integrated Systems -- 0.3%
Cologix, Inc. FRS
2nd Lien
8.24% (1 ML+7.00%)
due 03/20/2025............................... 110,000 110,733
Everi Payments, Inc. FRS
BTL-B
5.74% (1 ML+4.50%)
due 05/09/2024............................... 1,152,113 1,161,474
------------
1,272,207
------------
Consumer Products-Misc. -- 0.1%
Prestige Brands, Inc. FRS
BTL-B4
3.99% (1 ML+2.75%)
due 01/26/2024............................... 429,545 430,954
------------
Containers-Metal/Glass -- 1.0%
Anchor Glass Container Corp. FRS
1st Lien
3.98% (1 ML+2.75%)
due 12/07/2023............................... 364,308 365,446
Anchor Glass Container Corp. FRS
1st Lien
4.07% (3 ML+2.75%)
due 12/07/2023............................... 223,252 223,950
57
AIG Flexible Credit Fund
PORTFOLIO OF INVESTMENTS -- September 30, 2017 -- (unaudited)
(continued)
Principal Value
Security Description Amount (Note 2)
LOANS (continued)
Containers-Metal/Glass (continued)
Anchor Glass Container Corp. FRS
2nd Lien
9.07% (3 ML+7.75%)
due 12/07/2024........................... $ 796,000 $ 806,945
Berlin Packaging LLC FRS
BTL-B
4.49% (1 ML+3.25%)
due 10/01/2021........................... 539,870 542,373
Berlin Packaging LLC FRS
BTL-B
4.59% (3 ML+3.25%)
due 10/01/2021........................... 322,864 324,361
BWAY Corp. FRS
BTL-B
4.48% (1 ML+3.25%)
due 04/03/2024........................... 1,266,825 1,268,635
------------
3,531,710
------------
Containers-Paper/Plastic -- 0.9%
Klockner Pentaplast of America, Inc. FRS
BTL-B
5.58% (3 ML+4.25%)
due 06/30/2022........................... 1,970,000 1,971,641
Reynolds Group Holdings, Inc. FRS
BTL-B
4.24% (1 ML+3.00%)
due 02/05/2023........................... 1,443,561 1,449,234
------------
3,420,875
------------
Cosmetics & Toiletries -- 0.5%
Parfums Holding Co., Inc. FRS
BTL
6.08% (3 ML+4.75%)
due 06/30/2024........................... 1,087,275 1,093,617
Revlon Consumer Products Corp. FRS
BTL-B
4.74% (1 ML+3.50%)
due 09/07/2023........................... 626,834 561,213
------------
1,654,830
------------
Data Processing/Management -- 0.6%
First Data Corp. FRS
BTL
3.74% (1 ML+2.50%)
due 04/26/2024........................... 2,102,730 2,108,226
------------
Diagnostic Equipment -- 0.6%
Immucor, Inc. FRS
BTL-B3
6.24% (1 ML+5.00%)
due 06/15/2021........................... 109,725 111,097
Ortho-Clinical Diagnostics, Inc. FRS
BTL-B
5.08% (3 ML+3.75%)
due 06/30/2021........................... 2,040,812 2,044,851
------------
2,155,948
------------
Principal Value
Security Description Amount (Note 2)
Dialysis Centers -- 0.5%
U.S. Renal Care, Inc. FRS
BTL
5.58% (3 ML+4.25%)
due 12/31/2022.............................. $1,724,634 $ 1,669,303
------------
Disposable Medical Products -- 0.2%
Sterigenics-Nordion Holdings LLC FRS
BTL-B
4.24% (1 ML+3.00%)
due 05/15/2022.............................. 666,242 665,687
------------
Distribution/Wholesale -- 1.4%
American Builders & Contractors Supply Co.,
Inc. FRS
BTL-B1
3.74% (1 ML+2.50%)
due 10/31/2023.............................. 1,129,405 1,133,169
McJunkin Red Man Corp. FRS
BTL-B
4.74% (1 ML+3.50%)
due 09/20/2024.............................. 1,010,000 1,013,788
Siteone Landscape Supply, Inc. FRS
BTL-B
4.74% (1 ML+3.50%)
due 04/29/2022.............................. 689,117 692,562
Spin Holdco, Inc. FRS
BTL-B
5.01% (2 ML+3.75%)
due 11/14/2022.............................. 1,169,851 1,173,263
Univar USA, Inc. FRS
BTL-B2
3.99% (1 ML+2.75%)
due 07/01/2022.............................. 1,025,178 1,027,741
------------
5,040,523
------------
Diversified Financial Services -- 0.4%
NAB Holdings LLC FRS
BTL-B
4.83% (3 ML+3.50%)
due 07/01/2024.............................. 1,396,500 1,401,737
------------
E-Commerce/Services -- 0.1%
Hoya Midco LLC FRS
BTL-B
5.24% (1 ML+4.00%)
due 06/30/2024.............................. 518,700 517,403
------------
Educational Software -- 0.7%
Blackboard, Inc. FRS
BTL-B4
6.30% (3 ML+5.00%)
due 06/30/2021.............................. 2,477,217 2,388,966
------------
Electric-Generation -- 0.6%
APLP Holdings LP FRS
BTL
5.49% (1 ML+4.25%)
due 04/13/2023.............................. 1,141,534 1,150,095
58
AIG Flexible Credit Fund
PORTFOLIO OF INVESTMENTS -- September 30, 2017 -- (unaudited)
(continued)
Principal Value
Security Description Amount (Note 2)
LOANS (continued)
Electric-Generation (continued)
TEX Operations Co. LLC FRS
BTL-C
3.98% (1 ML+2.75%)
due 08/04/2023................................ $ 179,082 $ 179,338
TEX Operations Co. LLC FRS
BTL-B
3.98%-3.99% (1 ML+2.75%)
due 08/04/2023................................ 777,796 778,907
Vistra Operations Co. LLC FRS
BTL-B
3.98% (1 ML+2.75%)
due 12/14/2023................................ 228,275 228,941
------------
2,337,281
------------
Electric-Integrated -- 1.0%
Dayton Power & Light Co. FRS
BTL-B
4.49% (1 ML+3.25%)
due 08/24/2022................................ 152,845 154,947
Energy Future Intermediate Holding Co LLC FRS
DIP
4.24% (1 ML+3.00%)
due 06/30/2018................................ 2,340,000 2,350,724
Talen Energy Supply LLC FRS
BTL-B1
5.24% (1 ML+4.00%)
due 07/15/2023................................ 616,350 601,969
Talen Energy Supply LLC FRS
BTL-B2
5.24% (1ML+4.00%)
due 04/15/2024................................ 745,500 728,260
------------
3,835,900
------------
Enterprise Software/Service -- 1.7%
Applied Systems, Inc. FRS
BTL-B
4.57% (3 ML+3.25%)
due 09/19/2024................................ 180,000 181,625
Applied Systems, Inc. FRS
2nd Lien
8.32% (3 ML+7.00%)
due 09/19/2025................................ 205,000 210,125
BMC Software Finance, Inc. FRS
BTL
5.24% (1 ML+4.00%)
due 09/10/2022................................ 1,482,926 1,490,078
Donnelley Financial Solutions, Inc. FRS
BTL-B
7.25% (USFRBPLR+3.00%)
due 09/30/2023................................ 205,714 206,357
Kronos, Inc. FRS
1st Lien
4.81% (3 ML+3.50%)
due 11/01/2023................................ 2,211,318 2,222,034
Kronos, Inc. FRS
2nd Lien
9.56% (3 ML+8.25%)
due 11/01/2024................................ 440,000 452,870
Principal Value
Security Description Amount (Note 2)
Enterprise Software/Service (continued)
Veritas US, Inc. FRS
BTL-B
5.83% (3 ML+4.50%)
due 01/27/2023................................ $1,590,202 $ 1,599,856
------------
6,362,945
------------
Extended Service Contracts -- 0.6%
Sedgwick Claims Management Services, Inc. FRS
1st Lien
3.99% (1 ML+2.75%)
due 03/01/2021................................ 1,126,222 1,128,032
Sedgwick Claims Management Services, Inc. FRS
BTL
4.58% (3 ML+3.25%)
due 03/01/2021................................ 128,375 128,719
Sedgwick Claims Management Services, Inc. FRS
2nd Lien
6.99% (1 ML+5.75%)
due 02/28/2022................................ 970,000 972,829
------------
2,229,580
------------
Filtration/Separation Products -- 0.1%
Filtration Group, Inc. FRS
BTL-B
4.24% (1 ML+3.00%)
due 11/21/2020................................ 403,823 405,770
------------
Finance-Auto Loans -- 0.3%
Capital Automotive LP FRS
BTL-B
4.24% (1 ML+3.00%)
due 03/24/2024................................ 309,868 311,353
Capital Automotive LP FRS
2nd Lien
7.24% (1 ML+6.00%)
due 03/24/2025................................ 898,911 907,900
------------
1,219,253
------------
Finance-Mortgage Loan/Banker -- 0.7%
Walter Investment Management Corp. FRS
BTL-B
4.99% (1 ML+3.75%)
due 12/18/2020................................ 2,621,371 2,395,933
------------
Financial Guarantee Insurance -- 0.2%
VF Holdings Corp. FRS
BTL-B1
4.49% (1 ML+3.25%)
due 06/30/2023................................ 595,313 596,884
------------
Food-Baking -- 0.3%
Hostess Brands LLC FRS
BTL-B
3.74% (1 ML+2.50%)
due 08/03/2022................................ 1,049,946 1,053,227
------------
Food-Confectionery -- 0.2%
Amplify Snack Brands, Inc. FRS
1st Lien
6.74% (1 ML+5.50%)
due 09/02/2023................................ 562,260 555,232
------------
59
AIG Flexible Credit Fund
PORTFOLIO OF INVESTMENTS -- September 30, 2017 -- (unaudited)
(continued)
Principal Value
Security Description Amount (Note 2)
LOANS (continued)
Food-Dairy Products -- 0.4%
Chobani LLC FRS
BTL-B
coupon TBD
due 10/07/2023........................... $ 180,000 $ 181,575
Chobani LLC FRS
BTL-B
5.49% (1 ML+4.25%)
due 10/07/2023........................... 235,310 235,996
Milk Specialties Co. FRS
BTL
5.33% (3 ML+4.00%)
due 08/16/2023........................... 996,930 1,002,330
------------
1,419,901
------------
Food-Meat Products -- 0.4%
JBS USA LLC FRS
BTL-B
3.80% (3 ML+2.50%)
due 10/30/2022........................... 1,578,496 1,556,397
------------
Food-Misc./Diversified -- 0.2%
Dole Food Co., Inc. FRS
BTL-B
4.01%-4.02% (2 ML+2.75%)
due 04/06/2024........................... 648,947 650,570
Dole Food Co., Inc. FRS
BTL-B
4.08% (3 ML+2.75%)
due 04/06/2024........................... 31,726 31,806
Dole Food Co., Inc. FRS
BTL-B
6.00% (USFRBPLR+1.75%)
due 04/06/2024........................... 45 45
------------
682,421
------------
Food-Retail -- 0.3%
Albertson's LLC FRS
BTL-B4
3.99% (1 ML+2.75%)
due 08/25/2021........................... 662,102 636,342
Albertson's LLC FRS
BTL-B5
4.33% (3 ML+3.00%)
due 12/21/2022........................... 464,328 445,972
------------
1,082,314
------------
Gambling (Non-Hotel) -- 0.6%
Greektown Holdings LLC FRS
BTL
4.24% (1 ML+3.00%)
due 03/21/2024........................... 517,793 517,632
Mohegan Tribal Gaming Authority FRS
BTL-B
5.24% (1 ML+4.00%)
due 10/13/2023........................... 843,625 849,319
Scientific Games International, Inc. FRS
BTL-B4
4.49% (1 ML+3.25%)
due 08/14/2024........................... 172,720 213,401
Principal Value
Security Description Amount (Note 2)
Gambling (Non-Hotel) (continued)
Scientific Games International, Inc. FRS
BTL-B4
4.52% (2 ML+3.25%)
due 08/14/2024........................... $ 637,280 $ 787,380
------------
2,367,732
------------
Hotels/Motels -- 0.3%
Playa Resorts Holding BV FRS
BTL-B
4.32% (3 ML+3.00%)
due 04/05/2024........................... 1,286,775 1,283,826
------------
Housewares -- 0.2%
Libbey Glass, Inc. FRS
BTL-B
coupon TBD
due 04/09/2021........................... 775,000 710,094
------------
Human Resources -- 0.4%
CHG Healthcare Services, Inc. FRS
1st Lien
4.56% (3 ML+3.25%)
due 06/07/2023........................... 208,879 210,852
Team Health, Inc. FRS
1st Lien
3.99% (1ML+2.75%)
due 02/06/2024........................... 1,152,274 1,132,590
------------
1,343,442
------------
Investment Companies -- 0.7%
TKC Holdings, Inc. FRS
BTL
5.52% (2 ML+4.25%)
due 02/01/2023........................... 1,606,925 1,616,165
UFC Holdings LLC FRS
BTL-B
4.49% (1 ML+3.25%)
due 08/18/2023........................... 825,862 828,443
------------
2,444,608
------------
Investment Management/Advisor Services -- 0.5%
AlixPartners LLP FRS
BTL-B
4.33% (3 ML+3.00%)
due 04/04/2024........................... 1,582,050 1,584,876
Focus Financial Partners LLC FRS
1st Lien
4.55% (3 ML+3.25%)
due 07/03/2024........................... 145,000 146,087
------------
1,730,963
------------
Leisure Products -- 0.1%
Hayward Industries, Inc. FRS
BTL-B
4.74% (1 ML+3.50%)
due 08/05/2024........................... 380,000 382,217
------------
Machinery-Construction & Mining -- 0.1%
Paladin Brands Holding, Inc. FRS
BTL-B
coupon TBD
due 08/15/2022........................... 510,000 511,913
------------
60
AIG Flexible Credit Fund
PORTFOLIO OF INVESTMENTS -- September 30, 2017 -- (unaudited)
(continued)
Principal Value
Security Description Amount (Note 2)
LOANS (continued)
Machinery-General Industrial -- 1.5%
Gardner Denver, Inc. FRS
BTL-B
4.08% (3 ML+2.75%)
due 07/30/2024........................... $1,975,795 $ 1,976,558
Husky Injection Molding Systems, Ltd. FRS
BTL-B
4.49% (1 ML+3.25%)
due 06/30/2021........................... 1,553,536 1,563,422
Rexnord LLC FRS
BTL-B
3.99% (1 ML+2.75%)
due 08/21/2023........................... 126,045 126,470
Rexnord LLC FRS
BTL-B
4.06%-4.08% (3 ML+2.75%)
due 08/21/2023........................... 908,070 911,130
Zodiac Pool Solutions LLC FRS
BTL
5.33% (3 ML+4.00%)
due 12/20/2023........................... 1,017,325 1,023,048
------------
5,600,628
------------
Machinery-Pumps -- 0.3%
NN, Inc. FRS
BTL
4.99% (1 ML+3.75%)
due 03/22/2021........................... 553,700 553,239
NN, Inc. FRS
BTL-B
5.49% (1 ML+4.25%)
due 10/19/2022........................... 718,669 718,219
------------
1,271,458
------------
Medical Labs & Testing Services -- 0.4%
Explorer Holdings, Inc. FRS
BTL
5.06% (3 ML+3.75%)
due 05/02/2023........................... 264,331 265,322
Jaguar Holding Co. II FRS
BTL
3.99% (1 ML+2.75%)
due 08/18/2022........................... 251,619 252,791
Jaguar Holding Co. II FRS
BTL
4.08% (3 ML+2.75%)
due 08/18/2022........................... 280,032 281,337
US Anesthesia Partners, Inc. FRS
BTL
4.49% (1 ML+3.25%)
due 06/23/2024........................... 513,713 509,860
------------
1,309,310
------------
Medical Products -- 0.5%
DJO Finance LLC FRS
BTL-B
4.49% (1 ML+3.25%)
due 06/08/2020........................... 1,138,481 1,135,350
Principal Value
Security Description Amount (Note 2)
Medical Products (continued)
Greatbatch, Ltd. FRS
BTL-B
4.74% (1 ML+3.50%)
due 10/27/2022................................. $ 608,389 $ 610,062
------------
1,745,412
------------
Medical-Drugs -- 1.1%
Endo Luxembourg Finance Co. I SARL FRS
BTL-B
5.50% (1 ML+4.25%)
due 04/29/2024................................. 773,063 779,988
HLF Financing SARL FRS
BTL-B
6.74% (1 ML+5.50%)
due 02/15/2023................................. 548,625 552,740
Pharmerica Corp. FRS
1st Lien
coupon TBD
due 09/26/2024................................. 785,000 789,168
Pharmerica Corp. FRS
2nd Lien
coupon TBD
due 09/26/2025................................. 75,000 74,812
Valeant Pharmaceuticals International, Inc. FRS
BTL-BF1
5.99% (1 ML+4.75%)
due 04/01/2022................................. 1,669,295 1,698,383
------------
3,895,091
------------
Medical-Generic Drugs -- 0.2%
Amneal Pharmaceuticals LLC FRS
BTL-B2
4.83% (3 ML+3.50%)
due 11/01/2019................................. 666,038 669,368
------------
Medical-HMO -- 0.1%
MultiPlan, Inc. FRS
BTL-B
4.33% (3 ML+3.00%)
due 06/07/2023................................. 396,421 398,953
------------
Medical-Hospitals -- 1.7%
Acadia Healthcare Co., Inc. FRS
BTL-B2
3.98% (1 ML+2.75%)
due 02/16/2023................................. 606,533 610,627
Ardent Legacy Acquisitions, Inc. FRS
BTL-B
6.83% (3 ML+5.50%)
due 08/04/2021................................. 489,850 490,462
CHS/Community Health Systems, Inc. FRS
BTL-H
4.32% (3 ML+3.00%)
due 01/27/2021................................. 1,144,892 1,138,214
Envision Healthcare Corp. FRS
BTL-C
4.24% (1 ML+3.00%)
due 12/01/2023................................. 1,777,208 1,786,836
Quorum Health Corp. FRS
BTL
7.99% (1 ML+6.75%)
due 04/29/2022................................. 14,320 14,443
61
AIG Flexible Credit Fund
PORTFOLIO OF INVESTMENTS -- September 30, 2017 -- (unaudited)
(continued)
Principal Value
Security Description Amount (Note 2)
LOANS (continued)
Medical-Hospitals (continued)
Quorum Health Corp. FRS
BTL
8.07% (3 ML+6.75%)
due 04/29/2022.................... $ 541,153 $ 545,791
Select Medical Corp. FRS
BTL-B
4.81% (3 ML+3.50%)
due 03/01/2021.................... 954,991 963,050
Select Medical Corp. FRS
BTL-B
6.75% (USFRBPLR+2.50%)
due 03/01/2021.................... 209 210
Surgery Center Holdings, Inc. FRS
1st Lien
4.49% (1 ML+3.25%)
due 09/03/2024.................... 735,000 728,340
------------
6,277,973
------------
Medical-Outpatient/Home Medical -- 0.1%
21st Century Oncology, Inc. FRS
BTL-B
7.43% (3 ML+6.13%)
due 04/30/2022(5)................. 363,039 342,391
National Mentor Holdings, Inc. FRS
BTL-B
4.33% (3 ML+3.00%)
due 01/31/2021.................... 138,066 139,101
------------
481,492
------------
Motion Pictures & Services -- 0.1%
Lions Gate Entertainment Corp. FRS
BTL-B
4.24% (1 ML+3.00%)
due 12/08/2023.................... 458,338 460,744
------------
Non-Hazardous Waste Disposal -- 0.3%
Casella Waste Systems, Inc. FRS
BTL-B
3.98% (1 ML+2.75%)
due 10/17/2023.................... 687,802 689,522
Wrangler Buyer Corp. FRS
BTL-B
coupon TBD
due 09/27/2024.................... 585,000 586,755
------------
1,276,277
------------
Oil & Gas Drilling -- 0.6%
Jonah Energy LLC FRS
2nd Lien
9.75% (3ML+6.50%)
due 05/12/2021.................... 400,000 399,000
Paragon Offshore Finance Co.
Escrow Loans
6.00% due 07/18/2021+(2)(4)....... 2,672 0
Seadrill Operating LP FRS
BTL-B
4.33% (3 ML+3.00%)
due 02/21/2021.................... 2,480,670 1,815,024
------------
2,214,024
------------
Principal Value
Security Description Amount (Note 2)
Oil Companies-Exploration & Production -- 0.8%
Chesapeake Energy Corp Term Loan FRS
BTL
8.81% (3 ML+7.50%)
due 08/23/2021...................... $ 181,000 $ 194,405
Fieldwood Energy LLC FRS
1st Lien
8.33% (3 ML+7.00%)
due 08/31/2020...................... 480,382 420,335
Fieldwood Energy LLC FRS
1st Lien
8.46% (3 ML+7.13%)
due 09/30/2020...................... 128,766 87,561
Fieldwood Energy LLC FRS
2nd Lien
8.46% (3 ML+7.13%)
due 09/30/2020...................... 211,234 84,494
Gavilan Resources LLC FRS
2nd Lien
7.23% (1 ML+6.00%)
due 03/01/2024...................... 470,000 451,200
MEG Energy Corp. FRS
BTL
4.83% (3 ML+3.50%)
due 12/31/2023...................... 1,149,857 1,143,491
Ultra Resources, Inc. FRS
1st Lien
4.31% (3 ML+3.00%)
due 04/12/2024...................... 705,000 704,413
------------
3,085,899
------------
Oil-Field Services -- 0.3%
Traverse Midstream Partner LLC FRS
BTL
5.33% (3 ML+4.00%)
due 09/27/2024...................... 1,085,000 1,098,562
------------
Pharmacy Services -- 0.5%
Change Healthcare Holdings LLC FRS
BTL-B
3.99% (1ML +2.75%)
due 03/01/2024...................... 1,975,075 1,978,531
------------
Printing-Commercial -- 0.3%
Fort Dearborn Co. FRS
1st Lien
5.23% (1ML +4.00%)
due 10/19/2023...................... 15,369 15,458
Fort Dearborn Co. FRS
1st Lien
5.30% (3ML +4.00%)
due 10/19/2023...................... 1,128,628 1,135,212
------------
1,150,670
------------
Professional Sports -- 0.6%
Delta 2 Luxembourg SARL FRS
BTL-B3
4.24% (1 ML+3.00%)
due 02/01/2024...................... 2,025,000 2,030,062
------------
62
AIG Flexible Credit Fund
PORTFOLIO OF INVESTMENTS -- September 30, 2017 -- (unaudited)
(continued)
Principal Value
Security Description Amount (Note 2)
LOANS (continued)
Publishing-Books -- 0.2%
McGraw-Hill Global Education Holdings LLC FRS
BTL
5.24% (1 ML+4.00%)
due 05/04/2022............................... $ 869,000 $ 852,344
------------
Radio -- 0.1%
CBS Radio, Inc. FRS
BTL-B
4.74% (1 ML+3.50%)
due 10/17/2023............................... 321,541 323,451
------------
Real Estate Investment Trusts -- 0.2%
Uniti Group, Inc. FRS
BTL
4.24% (1 ML+3.00%)
due 10/24/2022............................... 769,188 710,537
------------
Real Estate Management/Services -- 0.4%
DTZ US Borrower LLC FRS
BTL-B
4.56%-4.58% (3 ML+3.25%)
due 11/04/2021............................... 1,466,250 1,468,694
------------
Real Estate Operations & Development -- 0.1%
Lightstone Generation LLC FRS
BTL-B
5.74% (1 ML+4.50%)
due 01/30/2024............................... 418,663 416,766
Lightstone Generation LLC FRS
BTL-C
5.74% (1 ML+4.50%)
due 01/30/2024............................... 26,087 25,969
------------
442,735
------------
Research & Development -- 0.1%
PAREXEL International Corp. FRS
BTL-B
coupon TBD
due 09/27/2024............................... 230,000 231,610
------------
Retail-Arts & Crafts -- 0.2%
Michaels Stores, Inc. FRS
BTL-B1
3.98%-3.99% (1 ML+2.75%)
due 01/30/2023............................... 847,239 845,386
------------
Retail-Auto Parts -- 0.4%
Dragon Merger Sub LLC FRS
1st Lien
5.31% (3 ML+4.00%)
due 07/24/2024............................... 1,410,000 1,424,100
------------
Retail-Bedding -- 0.3%
Serta Simmons Bedding LLC FRS
1st Lien
4.80%-4.81% (3 ML+3.50%)
due 11/08/2023............................... 975,100 945,319
------------
Retail-Building Products -- 0.4%
84 Lumber Co. FRS
BTL-B
6.99% (1 ML+5.75%)
due 10/04/2023............................... 1,599,438 1,616,099
------------
Principal Value
Security Description Amount (Note 2)
Retail-Drug Store -- 0.1%
Rite Aid Corp. FRS
BTL-2
5.12% (1 ML+3.88%)
due 06/21/2021..................................... $ 520,000 $ 521,842
------------
Retail-Major Department Stores -- 0.2%
Neiman Marcus Group, Ltd. LLC FRS
BTL
4.48% (1 ML+3.25%)
due 10/25/2020..................................... 763,023 567,499
------------
Retail-Misc./Diversified -- 0.2%
Leslie's Poolmart, Inc. FRS
BTL-B
5.06% (3 ML+3.75%)
due 08/16/2023..................................... 895,370 896,210
------------
Retail-Office Supplies -- 0.2%
Staples, Inc. FRS
BTL-B
5.31% (3 ML+4.00%)
due 09/12/2024..................................... 775,000 770,896
------------
Retail-Pet Food & Supplies -- 0.1%
PetSmart, Inc. FRS
BTL-B
4.24% (1 ML+3.00%)
due 03/11/2022..................................... 575,748 487,535
------------
Retail-Sporting Goods -- 0.3%
Bass Pro Group LLC FRS
BTL-B
6.24% (1 ML+5.00%)
due 12/16/2023..................................... 1,315,000 1,237,744
------------
Retail-Toy Stores -- 0.1%
Toys "R" Us-Delaware, Inc. FRS
BTL
coupon TBD
due 01/22/2019..................................... 205,000 207,050
------------
Rubber/Plastic Products -- 0.6%
Gates Global LLC FRS
BTL-B
4.58% (3 ML+3.25%)
due 04/01/2024..................................... 1,228,030 1,232,356
U.S. Farathane LLC FRS
BLT-B4
4.80% (3 ML+3.50%)
due 12/23/2021..................................... 1,069,025 1,071,698
------------
2,304,054
------------
Schools -- 0.7%
Laureate Education, Inc. FRS
BTL-B
5.74% (1 ML+4.50%)
due 04/26/2024..................................... 2,403,156 2,408,162
St. George's University Scholastic Services LLC FRS
BTL
5.48% (1 ML+4.25%)
due 07/06/2022..................................... 207,310 207,957
------------
2,616,119
------------
63
AIG Flexible Credit Fund
PORTFOLIO OF INVESTMENTS -- September 30, 2017 -- (unaudited)
(continued)
Principal Value
Security Description Amount (Note 2)
LOANS (continued)
Security Services -- 0.2%
Garda World Security Corp. FRS
BTL-B
5.31% (3 ML+4.00%)
due 05/24/2024........................... $ 494,265 $ 498,281
Garda World Security Corp. FRS
BTL-B
7.25% (USFRBPLR+3.00%)
due 05/24/2024........................... 1,242 1,252
Prime Security Services Borrower LLC FRS
BTL-B1
3.99% (1 ML+2.75%)
due 05/02/2022........................... 288,552 290,626
------------
790,159
------------
Soap & Cleaning Preparation -- 0.3%
Diamond (BC) B.V. FRS
USD BTL
4.32% (3 ML+3.00%)
due 09/06/2024........................... 1,105,000 1,101,980
------------
Telecom Services -- 1.8%
CenturyLink, Inc.
BTL-B
2.75% due 01/31/2025..................... 775,000 749,674
Coral-US Co. Borrower LLC FRS
BTL-B
4.74% (1 ML+3.50%)
due 01/31/2025........................... 565,000 558,026
Digicel International Finance, Ltd. FRS
BTL-B
5.07% (3 ML+3.75%)
due 05/28/2024........................... 465,000 467,519
Securus Technologies Holdings, Inc. FRS
BTL-B2
5.45% (1 ML+4.25%)
due 04/30/2020........................... 957,543 957,543
Securus Technologies Holdings, Inc. FRS
1st Lien
coupon TBD
due 06/20/2024........................... 1,350,000 1,358,437
Securus Technologies Holdings, Inc. FRS
2nd Lien
coupon TBD
due 06/15/2025........................... 670,000 673,350
UPC Financing Partnership FRS
BTL-AN
3.98% (1 ML+2.75%)
due 04/15/2025........................... 1,780,000 1,785,721
------------
6,550,270
------------
Telecommunication Equipment -- 0.0%
Sorenson Communications, Inc. FRS
BTL
7.08% (3 ML+5.75%)
due 04/30/2020........................... 99,742 99,992
------------
Television -- 0.2%
Mission Broadcasting, Inc. FRS
BTL-B2
3.74% (1 ML+2.50%)
due 01/17/2024........................... 66,042 66,183
Principal
Amount/ Value
Security Description Shares (Note 2)
Television (continued)
Tribune Media Co. FRS
BTL-B
4.24% (1 ML+3.00%)
due 12/27/2020.......................... $ 53,618 $ 53,668
Tribune Media Co. FRS
BTL-C
4.24% (1 ML+3.00%)
due 01/27/2024.......................... 668,275 669,110
------------
788,961
------------
Theaters -- 0.3%
CDS US Intermediate Holdings, Inc. FRS
BTL
5.30% (3 ML+4.00%)
due 07/08/2022.......................... 1,242,757 1,245,864
------------
Tools-Hand Held -- 0.3%
Apex Tool Group LLC FRS
BTL-B
4.50% (1 ML+3.25%)
due 02/01/2020.......................... 1,098,940 1,065,971
------------
Transport-Air Freight -- 0.1%
Air Medical Group Holdings, Inc. FRS
BTL
coupon TBD
due 09/07/2024.......................... 250,000 249,219
------------
Total Loans
(cost $178,768,395)..................... 177,863,233
------------
FOREIGN GOVERNMENT OBLIGATIONS -- 0.5%
Sovereign -- 0.5%
Republic of Argentina
Senior Notes
6.50% due 02/15/2023*................... 935,000 985,640
Republic of Argentina
Senior Notes
7.13% due 07/06/2036.................... 755,000 792,750
------------
Total Foreign Government Obligations
(cost $1,693,628)....................... 1,778,390
------------
COMMON STOCKS -- 0.4%
Electric-Generation -- 0.2%
Vistra Energy Corp.+..................... 27,942 522,236
Vistra Energy Corp. CVR+(2).............. 27,942 29,339
------------
551,575
------------
Multimedia -- 0.0%
Haights Cross Communication, Inc.+(2)(4). 19,388 0
------------
Oil Companies-Exploration & Production -- 0.1%
Bonanza Creek Energy, Inc.+.............. 5 165
Linn Energy, Inc.+....................... 10,500 379,575
------------
379,740
------------
Television -- 0.1%
ION Media Networks, Inc.+(2)(4)(10)...... 660 502,491
------------
Total Common Stocks
(cost $2,084,573)....................... 1,433,806
------------
64
AIG Flexible Credit Fund
PORTFOLIO OF INVESTMENTS -- September 30, 2017 -- (unaudited)
(continued)
Principal
Amount/ Value
Security Description Shares (Note 2)
PREFERRED SECURITIES -- 0.3%
Diversified Banking Institutions -- 0.3%
GMAC Capital Trust I FRS
Series 2
7.10% (3 ML+5.79%)
(cost $1,191,988).......................... 46,500 $ 1,227,600
------------
PREFERRED SECURITIES/CAPITAL SECURITIES -- 1.0%
Banks-Commercial -- 0.2%
Macquarie Bank, Ltd.
6.13% due 03/08/2027*(11).................. $ 675,000 698,423
------------
Banks-Super Regional -- 0.3%
KeyCorp.
5.00% due 09/15/2026(11)................... 1,150,000 1,190,250
------------
Diversified Banking Institutions -- 0.3%
Citigroup, Inc.
Series T
6.25% due 08/15/2026(11)................... 845,000 950,625
------------
Insurance-Multi-line -- 0.2%
Voya Financial, Inc.
5.65% due 05/15/2053....................... 600,000 637,200
------------
Total Preferred Securities/Capital Securities
(cost $3,301,975).......................... 3,476,498
------------
Total Long-Term Investment Securities
(cost $369,402,179)........................ 370,696,501
------------
SHORT-TERM INVESTMENT SECURITIES -- 0.1%
Registered Investment Companies -- 0.1%
State Street Institutional U.S. Government
Money Market Fund, Premier Class
0.92%(12)
(cost $406,600)............................ 406,600 406,600
------------
TOTAL INVESTMENTS --
(cost $369,808,779)(1)..................... 100.9% 371,103,101
Liabilities in excess of other assets......... (0.9) (3,241,667)
---------- ------------
NET ASSETS -- 100.0% $367,861,434
========== ============
--------
* Securities exempt from registration under Rule 144A of the Securities Act
of 1933. These securities may be sold in transactions exempt from
registration, normally to qualified institutional buyers. The Fund has no
right to demand registration of these securities. At September 30, 2017,
the aggregate value of these securities was $105,452,053 representing
28.7% of net assets. Unless otherwise indicated, these securities are not
considered to be illiquid.
+ Non-income producing security
(1) See Note 5 for cost of investments on a tax basis.
(2) Illiquid security. At September 30, 2017, the aggregate value of these
securities was $848,486 representing 0.2% of net assets.
(3) PIK ("Payment-in-Kind") security -- Income may be paid in additional
securities or cash at the discretion of the issuer. The security is
currently paying interest in cash at the coupon rate listed.
(4) Securities are classified as Level 3 (see Note 2).
(5) Company has filed for bankruptcy protection.
(6) Security in default of interest and principal at maturity.
(7) Senior loans in the Fund are generally subject to mandatory and/or
optional prepayment. Because of these mandatory prepayment conditions and
because there may be significant economic incentives for a borrower to
prepay, prepayments may occur. As a result, the actual remaining maturity
may be substantially less than the stated maturities shown.
(8) The Fund invests in senior loans which generally pay interest at rates
which are periodically re-determined by reference to a base lending rate
plus a premium. These base lending rates are generally either the lending
rate offered by one or more major European banks, such as the London
Inter-Bank Offer Rate ("LIBOR") or the prime rate offered by one or more
major United States banks, or the certificate of deposit rate. Senior
loans are generally considered to be restrictive in that the Fund is
ordinarily contractually obligated to receive approval from the Agent Bank
and/or borrower prior to the disposition of a senior loan.
(9) All loans in the Fund were purchased through assignment agreements unless
otherwise indicated.
(10) Denotes a restricted security that: (a) cannot be offered for public sale
without first being registered, or being able to take advantage of an
exemption from registration, under the Securities Act of 1933, as amended
(the "1933 Act"); (b) is subject to a contractual restriction on public
sales; or (c) is otherwise subject to a restriction on sales by operation
of applicable law. Restricted securities are valued pursuant to Note
2. Certain restricted securities held by the Fund may not be sold except
in exempt transactions or in a public offering registered under the 1933
Act. The Fund has no right to demand registration of these securities. The
risk of investing in certain restricted securities is greater than the
risk of investing in the securities of widely held, publicly traded
companies. To the extent applicable, lack of a secondary market and resale
restrictions may result in the inability of a Fund to sell a security at a
fair price and may substantially delay the sale of the security. In
addition, certain restricted securities may exhibit greater price
volatility than securities for which secondary markets exist. As of
September 30, 2017, the Fund held the following restricted securities:
Shares/ Value % of
Acquisition Principal Acquisition Per Net
Description Date Amount Cost Value Share Assets
----------- ----------- --------- ----------- -------- ------- ------
Common Stocks
ION Media
Networks,
Inc........ 12/21/2016 660 $6 $502,491 $761.35 0.14%
======== ====
(11) Perpetual maturity -- maturity date reflects the next call date.
(12) The rate shown is the 7-day yield as of September 30, 2017.
(13) Certain variable rate securities are not based on a published reference
rate and spread but are determined by the issuer or agent and are based on
current market conditions. These securities do not indicate a reference
rate and spread in their description above.
BTL --Bank Term Loan
CVR --Contingent Value Rights
DIP --Debtor-in-possession
TBD --Senior loan purchased on a when-issued or delayed-delivery basis. Certain
details associated with this purchase are not known prior to the
settlement date of the transaction. In addition, senior loans typically
trade without accrued interest and therefore a coupon rate is not
available prior to the settlement.
65
AIG Flexible Credit Fund
PORTFOLIO OF INVESTMENTS -- September 30, 2017 -- (unaudited)
(continued)
FRS --Floating Rate Security
VRS --Variable Rate Security
The rates shown on FRS and VRS are the current interest rates at September 30,
2017 and unless noted otherwise, the dates shown are the original maturity
dates.
Index Legend
1 ML -- 1 Month USD Libor
2 ML -- 2 Month USD Libor
3 ML -- 3 Month USD Libor
USFRBPLR --US Federal Reserve Bank Prime Loan Rate
The following is a summary of the inputs used to value the Fund's net assets as
of September 30, 2017 (see Note 2):
Level 1 -- Unadjusted Level 2 -- Other Level 3 -- Significant
Quoted Prices Observable Inputs Unobservable Inputs Total
- --------------------- ----------------- ---------------------- ------------
ASSETS:
Asset Backed Securities................. $ -- $ 825,667 $ -- $ 825,667
U.S. Corporate Bonds & Notes:
Rubber/Plastic Products............... -- -- 0 0
Other Industries...................... -- 147,230,456 -- 147,230,456
Foreign Corporate Bonds & Notes:
Special Purpose Entity................ -- -- 0 0
Other Industries...................... -- 36,860,851 -- 36,860,851
Loans:
Building-Residential/Commercial....... -- -- 0 0
Oil & Gas Drilling.................... -- 2,214,024 0 2,214,024
Other Industries...................... -- 175,649,209 -- 175,649,209
Foreign Government Obiligations......... -- 1,778,390 -- 1,778,390
Common Stocks:
Electric-Generation................... 522,236 29,339 -- 551,575
Multimedia............................ -- -- 0 0
Television............................ -- -- 502,491 502,491
Other Industries...................... 379,740 -- -- 379,740
Preferred Securities.................... 1,227,600 -- -- 1,227,600
Preferred Securities/Capital Securities. -- 3,476,498 -- 3,476,498
Short-Term Investment Securities........ 406,600 -- -- 406,600
---------- ------------ -------- ------------
Total Investments at Value.............. $2,536,176 $368,064,434 $502,491 $371,103,101
========== ============ ======== ============
--------
* For a detailed presentation of investments, please refer to the Portfolio of
Investments.
The Fund's policy is to recognize transfers between Levels as of the end of the
reporting period. There were no transfers between Levels during the reporting
period.
At the beginning and end of the reporting period, Level 3 investments were not
considered a material portion of the Fund.
See Notes to Financial Statements
66
SunAmerica Income Funds
NOTES TO FINANCIAL STATEMENTS -- September 30, 2017 -- (unaudited)
Note 1. Organization
The SunAmerica Income Funds (the "Trust") is a diversified open-end
management investment company organized as a Massachusetts business trust.
The Trust currently consists of three different series (each, a "Fund" and
collectively, the "Funds"). Each Fund is a separate series of the Trust with
distinct investment objectives and/or strategies. Each Fund is managed by
SunAmerica Asset Management, LLC (the "Adviser" or "SunAmerica"), an
indirect wholly-owned subsidiary of American International Group, Inc.
("AIG"). An investor may invest in one or more of the following Funds: AIG
U.S. Government Securities Fund ("U.S. Government Securities Fund"), AIG
Strategic Bond Fund ("Strategic Bond Fund"), and AIG Flexible Credit Fund
("Flexible Credit Fund"). The Funds are considered to be separate entities
for financial and tax reporting purposes.
The investment goals and principal investment techniques for each of the
Funds are as follows:
U.S. Government Securities Fund seeks high current income consistent with
relative safety of capital by the active trading of U.S. Government
securities, without regard to the maturities of such securities. Under
normal market conditions, at least 80% of the Fund's net assets plus any
borrowing for investment purposes will be invested in such securities.
Strategic Bond Fund seeks a high level of total return by the active trading
of a broad range of bonds, including both investment grade and
non-investment grade U.S. and foreign bonds (which may include "junk
bonds"), U.S. and foreign government and agency obligations, and
mortgage-backed securities, without regard to the maturities of such
securities. Under normal market conditions, at least 80% of the Fund's net
assets plus any borrowing for investment purposes will be invested in bonds.
Flexible Credit Fund seeks a high level of total return by the active
trading in credit instruments. Under normal circumstances, at least 80% of
the Fund's net assets, plus any borrowings for investment purposes, will be
invested in credit instruments and derivative instruments and
exchange-traded funds ("ETFs") that are linked to, or provide investment
exposure to, credit instruments. The Fund considers a credit instrument to
be any debt instrument or instrument with debt-like characteristics,
including but not limited to, corporate and sovereign bonds, secured
floating rate loans and other institutionally traded secured floating rate
debt obligations ("Loans"), and securitized instruments, which are
securities backed by pools of assets such as mortgages, loans, or other
receivables. The credit instruments in which the Fund intends to primarily
invest are U.S. and non-U.S. below investment grade, high yield bonds
(commonly referred to as "junk bonds") and Loans.
Each Fund offers multiple classes of shares. The classes within each Fund
are presented in the Statements of Assets and Liabilities. The cost
structure for each class is as follows:
Class A shares are offered at net asset value per share plus an initial
sales charge. Additionally, purchases of Class A shares in amounts of
$1,000,000 or more will be purchased at net asset value but will be subject
to a contingent deferred sales charge on redemptions made within two years
of purchase.
Class B shares are offered without an initial sales charge, although a
declining contingent deferred sales charge may be imposed on redemptions
made within six years of purchase. Class B shares convert automatically to
Class A shares on the first business day of the month following the eighth
anniversary of the issuance of such Class B shares and at such time will be
subject to the lower distribution fee applicable to Class A shares. The U.S.
Government Fund and the Flexible Credit Fund stopped offering Class B shares
for sale as of the close of business December 2, 2014. As of the close of
business January 27, 2015, Class B shares of each of the U.S. Government
Securities Fund and the Flexible Credit Fund converted to Class A shares of
each respective Fund.
Class C shares are offered at net asset value per share without an initial
sales charge and may be subject to a contingent deferred sales charge on
redemptions made within 12 months of purchase.
Class W shares are offered at net asset value per share. The class is
offered exclusively through advisory fee-based programs sponsored by certain
financial intermediaries and other programs. Class W shares of the Flexible
Credit Fund and the Strategic Bond Fund commenced operations effective
October 1, 2014 and January 29, 2015, respectively.
67
SunAmerica Income Funds
NOTES TO FINANCIAL STATEMENTS -- September 30, 2017 -- (unaudited)
(continued)
Each class of shares bears the same voting, dividend, liquidation and other
rights and conditions except as may otherwise be provided in the Trust's
registration statement. Class A, Class B and Class C shares each makes
distribution and account maintenance and service fee payments under the
distribution plan pursuant to Rule 12b-1 under the Investment Company Act of
1940, as amended (the "1940 Act"), except that Class B and Class C shares
are subject to higher distribution fees.
Indemnifications: The Trust's organizational documents provide current and
former officers and trustees with a limited indemnification against
liabilities arising out of the performance of their duties to the Trust. In
addition, pursuant to Indemnification Agreements between the Trust and each
of the current trustees who is not an "interested person," as defined in
Section 2(a)(19) of the 1940 Act, of the Trust (collectively, the
"Disinterested Trustees"), the Trust provides the Disinterested Trustees
with a limited indemnification against liabilities arising out of the
performance of their duties to the Trust, whether such liabilities are
asserted during or after their service as trustees. In addition, in the
normal course of business, the Trust enters into contracts that contain the
obligation to indemnify others. The Trust's maximum exposure under these
arrangements is unknown. Currently, however, the Trust expects the risk of
loss to be remote.
Note 2. Significant Accounting Policies
The preparation of financial statements in accordance with U.S. generally
accepted accounting principles ("GAAP") requires management to make
estimates and assumptions that affect the reported amounts and disclosures
in the financial statements. Actual results could differ from those
estimates and those differences could be significant. The following is a
summary of significant accounting policies consistently followed by the
Trust in the preparation of its financial statements:
Security Valuation: In accordance with the authoritative guidance on fair
value measurements and disclosures under GAAP, the Funds disclose the fair
value of their investments in a hierarchy that prioritizes the inputs to
valuation techniques used to measure the fair value. In accordance with
GAAP, fair value is defined as the price that the Funds would receive upon
selling an asset or transferring a liability in a timely transaction to an
independent third party in the principal or most advantageous market. GAAP
establishes a three-tier hierarchy to provide more transparency around the
inputs used to measure fair value and to establish classification of fair
value measurements for disclosure purposes. Inputs refer broadly to the
assumptions that market participants would use in pricing the asset or
liability, including assumptions about risk. Inputs may be observable or
unobservable. Observable inputs are inputs that reflect the assumptions
market participants would use in pricing the asset or liability developed
based on market data obtained from sources independent of the reporting
entity. Unobservable inputs are inputs that reflect the reporting entity's
own assumptions about the assumptions market participants would use in
pricing the asset or liability developed based on the best information
available in the circumstances. The three-tiers are as follows:
Level 1 -- Unadjusted quoted prices in active markets for identical
securities
Level 2 -- Other significant observable inputs (including quoted prices for
similar securities, interest rates, prepayment speeds, credit risk,
referenced indices, quoted prices in inactive markets, adjusted quoted
prices in active markets, adjusted quoted prices on foreign equity
securities that were adjusted in accordance with pricing procedures approved
by the Board of Trustees ("the Board"), etc.)
Level 3 -- Significant unobservable inputs (includes inputs that reflect the
Funds' own assumptions about the assumptions market participants would use
in pricing the security, developed based on the best information available
under the circumstances)
Changes in valuation techniques may result in transfers in or out of an
investment's assigned Level within the hierarchy. The methodology used for
valuing investments is not necessarily an indication of the risk associated
with investing in those investments and the determination of the
significance of a particular input to the fair value measurement in its
entirety requires judgment and consideration of factors specific to each
security.
The availability of observable inputs can vary from security to security and
is affected by a wide variety of factors, including, for example, the type
of security, whether the security is recently issued and not yet established
in the marketplace, the liquidity of markets, and other characteristics
particular to the security. To the extent that valuation is based on models
or inputs that are less observable or unobservable in the market, the
determination of fair value requires more judgment. Accordingly, the degree
of judgment exercised in determining fair value is greatest for instruments
categorized in Level 3.
68
SunAmerica Income Funds
NOTES TO FINANCIAL STATEMENTS -- September 30, 2017 -- (unaudited)
(continued)
The summary of each Fund's asset and liabilities classified in the fair
value hierarchy as of September 30, 2017 is reported on a schedule following
each Fund's Portfolio of Investments.
Stocks are generally valued based upon closing sales prices reported on
recognized securities exchanges on which the securities are principally
traded and are generally categorized as Level 1. Stocks listed on the NASDAQ
are valued using the NASDAQ Official Closing Price ("NOCP"). Generally, the
NOCP will be the last sale price unless the reported trade for the stock is
outside the range of the bid/ask price. In such cases, the NOCP will be
normalized to the nearer of the bid or ask price. For listed securities
having no sales reported and for unlisted securities, such securities will
be valued based upon the last reported bid price.
As of the close of regular trading on the New York Stock Exchange ("NYSE"),
securities traded primarily on security exchanges outside the United States
are valued at the last sale price on such exchanges on the day of valuation,
or if there is no sale on the day of valuation, at the last-reported bid
price. If a security's price is available from more than one exchange, the
Funds use the exchange that is the primary market for the security. Such
securities are generally categorized as Level 1. However, depending on the
foreign market, closing prices may be up to 15 hours old when they are used
to price a Fund's shares, and a Fund may determine that certain closing
prices do not reflect the fair value of the security. This determination
will be based on review of a number of factors, including developments in
foreign markets, the performance of U.S. securities markets, and the
performance of instruments trading in U.S. markets that represent foreign
securities and baskets of foreign securities. If a Fund determines that
closing prices do not reflect the fair value of the securities, the Fund
will adjust the previous closing prices in accordance with pricing
procedures approved by the Board to reflect what it believes to be the fair
value of the securities as of the close of regular trading on the NYSE. The
Funds may also fair value securities in other situations, for example, when
a particular foreign market is closed but a Fund is open. For foreign equity
securities and foreign equity futures contracts, the Funds use an outside
pricing service to provide it with closing market prices and information
used for adjusting those prices and when so adjusted, such securities and
futures are generally categorized as Level 2.
Bonds, debentures and other debt securities are valued at evaluated bid
prices obtained for the day of valuation from a Board-approved pricing
service, and are generally categorized as Level 2. The pricing service may
use valuation models or matrix pricing which considers information with
respect to comparable bond and note transactions, quotations from bond
dealers, or by reference to other securities that are considered comparable
in such characteristics as rating, interest rate, and maturity date, option
adjusted spread models, prepayments projections, interest rate spreads, and
yield curves to determine current value. If a price is unavailable from a
Board-approved pricing service, the securities may be priced at the mean of
two independent quotes obtained from brokers.
Senior floating rate loans ("Loans") are valued at the average of available
bids in the market for such Loans, as provided by a Board-approved loan
pricing service, and are generally categorized as Level 2.
Investments in registered investment companies that do not trade on an
exchange are valued at the end of day net asset value per share. Investments
in registered investment companies that trade on an exchange are valued at
the last sales price or official closing price as of the close of the
customary trading session on the exchange where the security is principally
traded. Investments in registered investment companies are generally
categorized as Level 1.
Forward foreign currency contracts ("forward contracts") are valued at the
4:00 p.m. Eastern Time forward rate and are generally categorized as Level 2.
Other securities are valued on the basis of last sale or bid price (if a
last sale price is not available) which is, in the opinion of the Adviser,
the broadest and most representative market, that may be either a securities
exchange or over-the-counter market and are generally categorized as Level 1
or Level 2.
The Board is responsible for the share valuation process and has adopted
policies and procedures (the "PRC Procedures") for valuing the securities
and other assets held by the Funds, including procedures for the fair
valuation of securities and other assets for which market quotations are not
readily available or are unreliable. The PRC Procedures provide for the
establishment of a pricing review committee, which is responsible for, among
other things, making certain determinations in connection with the
69
SunAmerica Income Funds
NOTES TO FINANCIAL STATEMENTS -- September 30, 2017 -- (unaudited)
(continued)
Trust's fair valuation procedures. Securities for which market quotations
are not readily available or the values of which may be significantly
impacted by the occurrence of developments or significant events are
generally categorized as Level 3. There is no single standard for making
fair value determinations, which may result in prices that vary from those
of other funds.
Derivative Instruments:
Forward Foreign Currency Contracts: During the period, the Strategic Bond
Fund used forward contracts to attempt to protect securities and related
receivables and payables against changes in future foreign exchange rates.
A forward contract is an agreement between two parties to buy or sell
currency at a set price on a future date. The market value of the contract
will fluctuate with changes in currency exchange rates. The contract is
marked-to-market daily using the forward rate and the cumulative change in
market value is recorded by a Fund as unrealized appreciation or
depreciation. On the settlement date, a Fund records either realized gains
or losses equal to the difference between the value of the contract at the
time it was opened and the value at the time it was closed.
Risks to the Funds of entering into forward contracts include counterparty
risk, market risk and illiquidity risk. Counterparty risk arises upon
entering into these contracts from the potential inability of counterparties
to meet the terms of their contracts. If the counterparty defaults, a Fund's
loss will generally consist of the net amount of contractual payments that
the Fund has not yet received though the Fund's maximum exposure due to
counterparty risk could extend to the notional amount of the contract.
Market risk is the risk that the value of the forward contract will
depreciate due to unfavorable changes in the exchange rates. These contracts
may involve market risk in excess of the unrealized appreciation or
depreciation reported on the Statements of Assets and Liabilities.
Illiquidity risk arises because the secondary market for forwards may have
less liquidity relative to markets for other securities. Currency
transactions are also subject to risks different from those of other
portfolio transactions. Because currency control is of great importance to
the issuing governments and influences economic planning and policy,
purchases and sales of currency and related instruments can be adversely
affected by government exchange controls, limitations or restrictions on
repatriation of currency, and manipulations or exchange restrictions imposed
by governments.
Forward foreign currency contracts outstanding at the end of the period, if
any, are reported on a schedule following each Fund's Portfolio of
Investments.
Master Agreements: Certain Funds that hold derivative instruments and other
financial instruments may be a party to ISDA (International Swaps and
Derivatives Association, Inc.) Master Agreements or similar agreements
("Master Agreements") with certain counterparties that govern certain
instruments. Master Agreements may contain provisions regarding, among other
things, the parties' general obligations, representations, agreements,
collateral requirements, events of default and early termination. Collateral
can be in the form of cash or securities as agreed to by the Fund and
applicable counterparty. Collateral requirements are generally determined
based on a Fund's net position with each counterparty. Master Agreements may
also include certain provisions that require a Fund to post additional
collateral upon the occurrence of certain events, such as when a Fund's net
assets fall below a specified level. In addition, Master Agreements
typically specify certain standard termination events, such as failure of a
party to pay or deliver, credit support defaults and other events of
default. Termination events applicable to a Fund may also occur upon a
decline in the Fund's net assets below a specified level over a certain
period of time. Additional termination events applicable to counterparties
may occur upon a decline in a counterparty's long-term and short-term credit
ratings below a specified level, or upon a decline in the ratings of a
counterparty's credit support provider. Upon the occurrence of a termination
event, the other party may elect to terminate early and cause settlement of
all instruments outstanding pursuant to a particular Master Agreement,
including the payment of any losses and costs resulting from such early
termination, as reasonably determined by the terminating party. Any decision
by one or more of a Fund's counterparties to elect early termination could
cause a Fund to accelerate the payment of liabilities, which settlement
amounts could be in excess of the amount of assets that are already posted
as collateral. Typically, the Master Agreement will permit a single net
payment in the event of default. Note, however, that bankruptcy or
insolvency laws of a particular jurisdiction may impose restrictions on or
prohibitions against the right of offset in bankruptcy, insolvency or other
events. As a result, the early termination with respect to derivative
instruments subject to Master Agreements that are in a net liability
position could be material to a Fund's financial statements. The Funds do
not offset derivative assets and derivative liabilities that are subject to
netting arrangements in the Statements of Asset and Liabilities.
70
SunAmerica Income Funds
NOTES TO FINANCIAL STATEMENTS -- September 30, 2017 -- (unaudited)
(continued)
The following tables represent the value of derivatives held as of
September 30, 2017, by their primary underlying risk exposure and respective
location on the Statements of Assets and Liabilities and the effect of
derivatives on the Statements of Operations for the period ended
September 30, 2017. The derivative contracts held during the period are not
accounted for as hedging instruments under GAAP. For a detailed presentation
of derivatives held as of September 30, 2017, please refer to each Fund's
Portfolio of Investments.
Liability
Asset Derivatives Derivatives
----------------- ------------
Foreign Foreign
Exchange Exchange
Contracts Contracts
----------------- ------------
Foreign Foreign
Exchange Exchange
Fund Contracts(1) Contracts(2)
---- ----------------- ------------
Strategic Bond. $143,363 $71,704
======== =======
--------
Statement of Assets and Liabilities Location:
(1)Unrealized appreciation on forward foreign currency contracts
(2)Unrealized depreciation on forward foreign currency contracts
Change in
Unrealized
Realized Gain Appreciation
(Loss) on (Depreciation) on
Derivatives Derivatives
Recognized in Recognized in
Statement of Statement of
Operations Operations
------------- -----------------
Foreign Foreign
Exchange Exchange
Contracts Contracts
------------- -----------------
Foreign Foreign
Exchange Exchange
Fund Contracts(1) Contracts(2)
---- ------------- -----------------
Strategic Bond. $(2,582,670) $124,202
=========== ========
--------
Statement of Operations Location:
(1)Net realized gain (loss) on forward contracts
(2)Change in unrealized appreciation (depreciation) on forward contracts
The following table represents the average monthly balances of derivatives
held during the six months ended September 30, 2017:
Average Amount
Outstanding
During the Year
---------------
Foreign
Exchange
Fund Contracts(1)
---- ---------------
Strategic Bond. $27,589,958
===========
--------
(1)Amounts represent notional amounts in US dollars.
There were no derivative assets and liabilities subject to Master Agreements
outstanding at September 30, 2017. The repurchase agreements held by the
Funds as of September 30, 2017, are subject to Master Agreements. See the
Portfolio of Investments and the Notes to the Financial Statements for more
information about the Funds' holdings in repurchase agreements.
71
SunAmerica Income Funds
NOTES TO FINANCIAL STATEMENTS -- September 30, 2017 -- (unaudited)
(continued)
Mortgage-Backed Dollar Rolls: During the six months ended September 30,
2017, the Strategic Bond Fund entered into dollar rolls using "to be
announced" ("TBA") mortgage-backed securities ("TBA Rolls"). TBA Roll
transactions involve the sale of mortgage or other asset backed securities
with the commitment to purchase substantially similar securities on a
specified future date. The Funds' policy is to record the components of TBA
Rolls as purchase/sale transactions. Any difference between the purchase and
sale price is recorded as a realized gain or loss on the date the
transaction is entered into. TBA Roll transactions involve the risk that the
market value of the securities held by a Fund may decline below the price of
the securities that the Fund has sold but is obligated to repurchase under
the agreement. In the event that the buyer of securities in a TBA Roll
transaction files bankruptcy or becomes insolvent, a Fund's use of the
proceeds from the sale of the securities may be restricted pending a
determination by the other party, or its trustee or receiver, whether to
enforce the Fund's obligation to repurchase the securities. The return
earned by a Fund with the proceeds of the TBA Roll transaction may not
exceed the transaction costs.
When-Issued Securities and Forward Commitments: Certain Funds may purchase
or sell when-issued securities that have been authorized, but not yet issued
in the market. In addition, a Fund may purchase or sell securities on a
forward commitment basis. A forward commitment involves entering into a
contract to purchase or sell securities, typically on an extended settlement
basis, for a fixed price at a future date. The Funds may engage in
when-issued or forward commitment transactions in order to secure what is
considered to be an advantageous price and yield at the time of entering
into the obligation. The purchase of securities on a when-issued or forward
commitment basis involves a risk of loss if the value of the security to be
purchased declines before the settlement date. Conversely, the sale of
securities on a when-issued or forward commitment basis involves the risk
that the value of the securities sold may increase before the settlement
date. For the period ended September 30, 2017, the Strategic Bond Fund
purchased and/or sold when-issued securities.
Stripped Mortgage-Backed Securities: Stripped Mortgage-Backed Securities
("SMBS") are multiple-class mortgage-backed securities. SMBS are often
structured with two classes that receive different proportions of the
interest and principal distributions on a pool of mortgage assets. SMBS have
greater market volatility than other types of U.S. government securities in
which a Fund invests. A common type of SMBS has one class receiving some of
the interest and all or most of the principal (the "principal only" class)
from the mortgage pool, while the other class will receive all or most of
the interest (the "interest only" class). The yield to maturity on an
interest only class is extremely sensitive not only to changes in prevailing
interest rates, but also to the rate of principal payments, including
principal prepayments, on the underlying pool of mortgage assets, and a
rapid rate of principal payment may have a material adverse effect on a
Fund's yield.
Inflation-Indexed Bonds: Certain Funds may purchase inflation-indexed bonds.
Inflation-indexed bonds are fixed income securities whose principal value is
adjusted periodically according to the rate of inflation. Two structures are
common. The U.S. Treasury and certain other issuers use a structure that
reflects inflation in the principal value of the bond. Other issuers pay out
any inflation related accruals as part of a semiannual coupon. The value of
inflation-indexed bonds is expected to change in response to changes in real
interest rates. Real interest rates, in turn, are tied to the relationship
between nominal interest rates (i.e., stated interest rates) and the rate of
inflation. Therefore, if the rate of inflation rises at a faster rate than
nominal interest rates, real interest rates (i.e., nominal interest rates
minus inflation) might decline, leading to an increase in value of
inflation-indexed bonds. In contrast, if nominal interest rates increase at
a faster rate than inflation, real interest rates might rise, leading to a
decrease in value of inflation-indexed bonds. There can be no assurance,
however, that the value of inflation-indexed bonds will be directly
correlated to changes in nominal interest rates, and short-term increases in
inflation may lead to a decline in their value. Coupon payments received
from inflation-indexed bonds are recorded in the Statements of Operations as
interest income. In addition, any increase or decrease in the principal
amount of an inflation-indexed bond will be recorded in the Statements of
Operations as an increase or decrease to interest income, even though
principal is not paid until maturity.
Repurchase Agreements: The Funds, along with other affiliated registered
investment companies, pursuant to procedures adopted by the Board and
applicable guidance from the Securities and Exchange Commission ("SEC"), may
transfer uninvested cash balances into a single joint account, the daily
aggregate balance of which is invested in one or more repurchase agreements
collateralized by U.S. Treasury or federal agency obligations. In a
repurchase agreement, the seller of a security agrees to repurchase the
security at a mutually agreed-upon time and price, which reflects the
effective rate of return for the term of the agreement. For repurchase
agreements and joint repurchase agreements, the Trust's custodian takes
possession of the collateral pledged for investments in such repurchase
agreements ("repo" or collectively "repos"). The underlying collateral is
valued daily on a mark to market basis, plus accrued interest to ensure that
the value, at the time the agreement is entered into, is equal to at
72
SunAmerica Income Funds
NOTES TO FINANCIAL STATEMENTS -- September 30, 2017 -- (unaudited)
(continued)
least 102% of the repurchase price, including accrued interest. In the event
of default of the obligation to repurchase, a Fund has the right to
liquidate the collateral and apply the proceeds in satisfaction of the
obligation. If the seller defaults and the value of the collateral declines
or if bankruptcy proceedings are commenced with respect to the seller of the
security, realization of the collateral by a Fund may be delayed or limited.
Securities Transactions, Investment Income, Expenses, Dividends and
Distributions to Shareholders: Security transactions are recorded on a trade
date basis. Interest income is accrued daily from settlement date except
when collection is not expected. Dividend income is recorded on the
ex-dividend date except for certain dividends from foreign securities, which
are recorded as soon as the Trust is informed after the ex-dividend date.
Paydown gains and losses on mortgage and asset-backed securities are
recorded as components of interest income on the Statements of Operations.
For financial statement purposes, the Funds amortize all premiums and
accrete all discounts on fixed income securities.
Securities purchased or sold on a when-issued or forward commitment basis
are included in investments purchased/sold on an extended settlement basis
in the Statement of Assets and Liabilities.
Realized gains and losses on the sale of investments are calculated on the
identified cost basis. Funds which earn foreign income and capital gains may
be subject to foreign withholding taxes and capital gains taxes at various
rates. Under applicable foreign law, a withholding of tax may be imposed on
interest, dividends, and capital gains from the sale of foreign securities
at various rates.
Net investment income, expenses other than class specific expenses, and
realized and unrealized gains and losses are allocated daily to each class
of shares based upon the relative net asset value of outstanding shares of
each class of shares at the beginning of the day (after adjusting for
current capital shares activity of the respective class).
Expenses common to all Funds are allocated among the Funds based upon
relative net assets or other appropriate allocation methods. In all other
respects, expenses are charged to each Fund as incurred on a specific
identification basis.
Dividends from net investment income are accrued daily and paid monthly.
Capital gain distributions, if any, are paid annually. The Funds record
dividends and distributions to their shareholders on the ex-dividend date.
The Funds reserve the right to declare and pay dividends less frequently
than disclosed above, provided that the net realized capital gains and net
investment income, if any, are paid at least annually.
The amount of dividends and distributions from net investment income and net
realized capital gains are determined in accordance with federal income tax
regulations, which may differ from GAAP. These "book/tax" differences are
either considered temporary or permanent in nature. To the extent these
differences are permanent in nature, such amounts are reclassified within
the capital accounts at fiscal year end based on their federal tax-basis
treatment; temporary differences do not require reclassification. Net assets
are not affected by these reclassifications.
Each Fund is considered a separate entity for tax purposes and intends to
comply with the requirements of the Internal Revenue Code, as amended,
applicable to regulated investment companies and distribute all of its
taxable income, including any net capital gains on investments, to its
shareholders. Each Fund also intends to distribute sufficient net investment
income and net capital gains, if any, so that it will not be subject to
excise tax on undistributed income and gains. Therefore, no federal income
tax or excise tax provision is required.
The Funds recognize the tax benefits of uncertain tax positions only when
the position is more likely than not to be sustained, assuming examination
by tax authorities. Management has analyzed each Fund's tax positions and
concluded that no liability for unrecognized tax benefits should be recorded
related to uncertain tax positions taken on returns filed for open tax years
2013 -- 2015 or expected to be taken in each Fund's 2016 tax return. The
Funds are not aware of any tax provisions for which it is reasonably
possible that the total amounts of unrecognized tax benefits will change
materially in the next twelve months. The Funds file U.S. federal and
certain state income tax returns. With few exceptions, the Funds are no
longer subject to U.S. federal and state tax examinations by tax authorities
for tax returns ending before 2013.
73
SunAmerica Income Funds
NOTES TO FINANCIAL STATEMENTS -- September 30, 2017 -- (unaudited)
(continued)
Foreign Currency Translation: The books and records of the Funds are
maintained in U.S. dollars. Assets and liabilities denominated in foreign
currencies and commitments under forward foreign currency contracts are
translated into U.S. dollars based on the exchange rate of such currencies
against U.S. dollars on the date of valuation.
The Funds do not isolate that portion of the results of operations arising
as a result of changes in the foreign exchange rates from the changes in the
market prices of securities held at the end of the period. Similarly, the
Funds do not isolate the effect of changes in foreign exchange rates from
the changes in the market prices of portfolio securities sold during the
period.
Realized foreign exchange gains and losses on other assets and liabilities
and change in unrealized foreign exchange gains and losses on other assets
and liabilities located in the Statements of Operations include realized
foreign exchange gains and losses from currency gains or losses between the
trade and the settlement dates of securities transactions, the difference
between the amounts of interest, dividends and foreign withholding taxes
recorded on the Funds' books and the U.S. dollar equivalent amounts actually
received or paid and changes in the unrealized foreign exchange gains and
losses relating to the other assets and liabilities arising as a result of
changes in the exchange rates and realized gains and losses on forward
foreign currency contracts.
New Accounting Pronouncement: In October 2016, the SEC adopted amendments to
rules under the 1940 Act ("final rules") intended to modernize the reporting
and disclosure of information by registered investment companies. The final
rules amend Regulation S-X and require funds to provide standardized,
enhanced derivative disclosure in fund financial statements in a format
designed for individual investors. The amendments to Regulation S-X also
update the disclosures for other investments and investments in and advances
to affiliates and amend the rules regarding the general form and content of
fund financial statements. The compliance date for the amendments to
Regulation S-X is August 1, 2017. All required changes have been made in
accordance with Regulation S-X.
Note 3. Investment Advisory and Management Agreement, Distribution Agreement
and Service Agreement
The Trust, on behalf of each Fund, has an Investment Advisory and Management
Agreement (the "Agreement") with SunAmerica. Under the Agreement, SunAmerica
provides continuous supervision of a Fund's portfolio and administers its
corporate affairs, subject to general review by the Trustees. In connection
therewith, SunAmerica furnishes the Funds with office facilities, maintains
certain of the Funds' books and records, and pays the salaries and expenses
of all personnel, including officers of the Funds, who are employees of
SunAmerica and its affiliates.
The Funds pay SunAmerica a monthly investment advisory and management fee
calculated daily at the following annual percentages of each Fund's average
daily net assets:
Management
Fund Assets Fees
---- ---------------------------- ----------
U.S. Government Securities........................ $0 - $200 million 0.650%
(greater than) $200 million 0.620
(greater than) $400 million 0.550
Strategic Bond.................................... $0 - $350 million 0.650
(greater than) $350 million 0.600
Flexible Credit................................... $0 - $200 million 0.750
(greater than) $200 million 0.720
(greater than) $400 million 0.550
The Strategic Bond Fund is subadvised by PineBridge Investments, LLC
("PineBridge") and the Flexible Credit Fund is subadvised by Newfleet Asset
Management, LLC ("Newfleet"). Under the Subadvisory Agreements, PineBridge
and Newfleet manage the investment and reinvestment of the assets of the
Strategic Bond Fund and the Flexible Credit Fund, respectively.
74
SunAmerica Income Funds
NOTES TO FINANCIAL STATEMENTS -- September 30, 2017 -- (unaudited)
(continued)
SunAmerica pays PineBridge and Newfleet fees out of the investment advisory
fees it receives from the respective Funds. The portion of the investment
advisory fees received by SunAmerica that are paid to PineBridge and
Newfleet Asset Management, LLC with respect to the Strategic Bond Fund and
Flexible Credit Fund are as follows:
Subadvisory
Fund Assets Fees
---- ---------------------------- -----------
Strategic Bond.................................... $0 - $200 million 0.350%
(greater than) $200 million 0.250
(greater than) $500 million 0.200
Flexible Credit................................... $0 - $200 million 0.300
(greater than) $200 million 0.250
(greater than) $400 million 0.150
SunAmerica has contractually agreed to waive fees and/or reimburse expenses,
to the extent necessary to cap the Funds' annual fund operating expenses at
the following percentages of each Fund's average net assets. For the
purposes of waived fees and/or reimbursed expense calculations, annual Fund
operating expenses shall not include extraordinary expenses (i.e., expenses
that are unusual in nature and/or infrequent in occurrence, such as
litigation), or acquired Fund fees and expenses, brokerage commissions and
other transactional expenses relating to the purchase and sale of portfolio
securities, interest, taxes and governmental fees, and other expenses not
incurred in the ordinary course of a Fund's business. The contractual fee
waivers and expense reimbursements will continue indefinitely, subject to
termination by the Trustees, including a majority of the Disinterested
Trustees.
Fund Percentage
---- ----------
U.S. Government Securities Class A..... 0.99%
U.S. Government Securities Class C..... 1.64
Strategic Bond Class A................. 1.40
Strategic Bond Class B................. 2.05
Strategic Bond Class C................. 2.05
Strategic Bond Class W................. 1.20
Flexible Credit Class A................ 1.45
Flexible Credit Class C................ 2.10
Flexible Credit Class W................ 1.25
For the U.S. Government Securities Fund, any contractual waivers and/or
reimbursements made by SunAmerica are subject to recoupment from the Fund
within two years after the occurrence of the waivers and/or reimbursements,
provided that the Fund is able to effect such payment to SunAmerica and
remain in compliance with the expense limitations in effect at the time the
waivers and/or reimbursements were made.
For the period ended September 30, 2017, pursuant to the contractual expense
limitations in the above tables SunAmerica has waived and/or reimbursed
expenses as follows:
Other Expenses
Fund Reimbursed
---- --------------
U.S. Government Securities......... $ 97,409
Class Specific
Fund Expenses
---- --------------
U.S. Government Securities Class A. $185,758
U.S. Government Securities Class C. 35,577
75
SunAmerica Income Funds
NOTES TO FINANCIAL STATEMENTS -- September 30, 2017 -- (unaudited)
(continued)
At September 30, 2017, expenses previously waived or reimbursed by
SunAmerica that are subject to recoupment and expire during the time period
indicated are as follows:
Other Expenses Reimbursed
------------------------------------------------
Fund March 31, 2018 March 31, 2019 September 30, 2019
---- -------------- -------------- ------------------
U.S. Government Securities......... $103,312 $190,664 $ 97,409
Class Specific Expenses Reimbursed
------------------------------------------------
Fund March 31, 2018 March 31, 2019 September 30, 2019
---- -------------- -------------- ------------------
U.S. Government Securities Class A. $190,851 $402,860 $185,758
U.S. Government Securities Class C. 34,881 81,730 35,577
The Trust, on behalf of each Fund, has entered into a Distribution Agreement
with AIG Capital Services, Inc. ("ACS" or "Distributor"), an affiliate of
the Adviser. Each Fund has adopted a Distribution Plan on behalf of each
Class (other than Class W shares of the Strategic Bond and Flexible Credit
Funds), in accordance with the provisions of Rule 12b-1 under the 1940 Act
(each, a "Plan," and collectively, the "Plans"), hereinafter referred to as
the "Class A Plan," the "Class B Plan" and the "Class C Plan." In adopting
the Class A Plan, the Class B Plan and the Class C Plan, the Trustees
determined that there was a reasonable likelihood that each such Plan would
benefit the Trust and the shareholders of the respective class. The sales
charge and distribution fees of a particular class will not be used to
subsidize the sale of shares of any other class.
The Class A, Class B and Class C Plans provide that the Trust, on behalf of
the respective classes, shall pay the Distributor a distribution fee at an
annual rate of up to 0.10%, 0.75% and 0.75%, of average daily net assets of
such Fund's Class A, Class B and Class C shares, respectively, to compensate
the Distributor and certain securities firms for providing sales and
promotional activities for distributing that class of shares. The
distribution costs for which the Distributor may be compensated include fees
paid to broker-dealers that have sold Fund shares, commissions, and other
expenses such as those incurred for sales literature, prospectus printing
and distribution and compensation to wholesalers. It is possible that in any
given year, the amount paid to the Distributor under the Class A Plan, Class
B Plan or Class C Plan may exceed the Distributor's distribution costs as
described above. Except for Class W shares of the Strategic Bond and
Flexible Credit Funds, the Plans also provide that each class of shares of
the Trust will also pay the Distributor an account maintenance fee at the
annual rate of up to 0.25% of the aggregate average daily net assets of such
class of shares to compensate the Distributor and securities firms for
account maintenance activities. For the period ended September 30, 2017, ACS
received fees as reflected in the Statements of Operations based on the
aforementioned rates.
The Trust, on behalf of the Strategic Bond and Flexible Credit Funds, has
entered into an Administrative and Shareholder Services Agreement with ACS,
pursuant to which ACS is paid an annual fee of 0.15% of average daily net
assets of Class W shares as compensation for providing additional
shareholder services to Class W shareholders. For the period ended
September 30, 2017, ACS earned fees as reflected in the Statements of
Operations based on the aforementioned rate.
ACS receives sales charges on each Fund's Class A shares, portions of which
are reallowed to affiliated broker-dealers and non-affiliated
broker-dealers. ACS also receives the proceeds of contingent deferred sales
charges paid by investors in connection with certain redemptions of Class A,
Class B and Class C shares. ACS has advised the Funds that for the period
ended September 30, 2017, the proceeds received from Class A sales (and paid
out to affiliated and non-affiliated broker-dealers) and Class A, Class B
and Class C redemptions were as follows:
Class A Class B Class C
---------------------------------------------------- ------------- -------------
Contingent Contingent Contingent
Sales Affiliated Non-affiliated Deferred Deferred Deferred
Fund Charges Broker-dealers Broker-dealers Sales Charges Sales Charges Sales Charges
---- -------- -------------- -------------- ------------- ------------- -------------
U.S. Government Securities. $ 10,574 $ 1,667 $ 7,140 $ 143 $ -- $ 341
Strategic Bond............. 227,650 57,087 151,461 426 18,897 1,482
Flexible Credit............ 143,417 21,971 103,191 3,627 -- 4,923
The Trust has entered into a Service Agreement with AIG Fund Services, Inc.
("AFS"), an affiliate of the Adviser. Under the Service Agreement, AFS
performs certain shareholder account functions by assisting the Funds'
transfer agent, State Street Bank
76
SunAmerica Income Funds
NOTES TO FINANCIAL STATEMENTS -- September 30, 2017 -- (unaudited)
(continued)
and Trust Company ("State Street") in connection with the services that it
offers to the shareholders of the Funds. The Service Agreement permits the
Funds to compensate AFS for services rendered, based upon an annual rate of
0.22% of average daily net assets, which is approved annually by the
Trustees. For the period ended September 30, 2017, the Funds incurred the
following expenses which are included in transfer agent fees and expenses in
the Statements of Operations to compensate AFS pursuant to the terms of the
Service Agreement:
Payable at
Fund Expenses September 30, 2017
---- -------- ------------------
US Government Securities Class A. $160,103 $24,050
US Government Securities Class C. 19,124 2,641
Strategic Bond Class A........... 186,971 30,546
Strategic Bond Class B........... 32,186 5,168
Strategic Bond Class C........... 128,981 19,670
Strategic Bond Class W........... 52,561 9,885
Flexible Credit Class A.......... 162,314 25,728
Flexible Credit Class C.......... 82,342 13,225
Flexible Credit Class W.......... 172,967 27,392
At September 30, 2017, AIG Active Allocation Portfolio and AIG Multi-Asset
Allocation Portfolio, each a series of SunAmerica Series, Inc., owned a
percentage of the outstanding shares of the following Funds:
Holder
---------------------
AIG AIG
Active Multi-Asset
Allocation Allocation
Fund Portfolio Portfolio
---- ---------- -----------
U.S. Government Securities . . . . . . . . . . . . .. 8.56% 17.07%
Strategic Bond . . . . . . . . . . . ................ 3.00 --
Flexible Credit . . . . . . ......................... 2.82 3.39
Note 4. Purchases and Sales of Investment Securities
The cost of purchases and proceeds from sales and maturities of long-term
investments during the six months ended September 30, 2017 were as follows:
Purchases of Investment Sales of Investment Purchase of U.S. Sales of U.S.
Securities (Excluding U.S. Securities (Excluding U.S. Government Government
Fund Government Securities) Government Securities) Securities Securities
---- -------------------------- -------------------------- ---------------- -------------
U.S. Government Securities. $ -- $ -- $27,720,469 $34,837,886
Strategic Bond............. 212,303,178 194,826,722 42,107,552 52,452,945
Flexible Credit............ 125,730,121 133,649,991 -- --
Note 5. Federal Income Taxes
The following details the tax basis of distributions as well as the
components of distributable earnings. The tax basis components of
distributable earnings differ from the amounts reflected in the Statements
of Assets and Liabilities by temporary book/tax differences primarily
arising from wash sales, post October capital losses, late year ordinary
losses, distributions payable, straddle loss deferrals, amortization of
premium/discount and treatment of defaulted securities.
Distributable Earnings Tax Distributions
For the year ended March 31, 2017 For the year ended March 31, 2017
---------------------------------------- ---------------------------------
Long-term Unrealized
Ordinary Gains/ Capital Appreciation Ordinary Long-Term
Fund Income Loss Carryover (Depreciation)* Income Capital Gains
---- ---------- -------------- --------------- ----------- -------------
U.S. Government Securities. $ 530,181 $(13,576,279) $ 2,897,985 $ 3,089,605 $--
Strategic Bond............. 670,627 (74,079,874) (1,215,751) 11,239,760 --
Flexible Credit............ 1,074,824 (49,857,256) 654,033 13,948,606 --
--------
* Unrealized appreciation (depreciation) includes amounts for derivatives and
other assets and liabilities denominated in foreign currency.
77
SunAmerica Income Funds
NOTES TO FINANCIAL STATEMENTS -- September 30, 2017 -- (unaudited)
(continued)
As of March 31, 2017, for Federal income tax purposes, the Funds indicated
below have capital loss carryforwards, which expire in the year indicated,
which are available to offset future capital gains, if any:
Capital Loss
Carryforward+ Unlimited+
------------- ----------------------
Fund 2018 ST LT
---- ------------- ---------- -----------
U.S. Government Securities. $ -- $8,871,280 $ 4,704,999
Strategic Bond............. 49,688,392 2,697,374 21,694,108
Flexible Credit............ 41,322,811 984,379 7,550,066
--------
+ On December 22, 2010, the Regulated Investment Company Modernization Act of
2010 (the "Act") was enacted which changes various technical rules governing
the tax treatment of regulated investment companies. The changes are
generally effective taxable years beginning after the date of enactment.
Under the Act, the fund will be permitted to carry forward capital losses
incurred in taxable years beginning after the date of enactment for an
unlimited period. However, any losses incurred during those future taxable
years will be required to be utilized prior to the losses incurred in
pre-enactment taxable years, which carry an expiration date. As a result of
this ordering rule, pre-enactment capital loss carryforwards may be more
likely to expire unused. Additionally, post-enactment capital losses that
are carried forward will retain their character as either short-term or
long-term losses rather than being considered all short-term as under
previous law.
Under the current law, capital losses realized after October 31 and late
year ordinary losses may be deferred and treated as occurring on the first
day of the following year. For the fiscal year ended March 31, 2017, the
Funds elected to defer late year ordinary losses and post October capital
losses as follows:
Deferred Deferred
Deferred Post-October Post-October
Late Year Short-Term Long-Term
Fund Ordinary Loss Capital Loss Capital Loss
---- ------------- ------------ ------------
U.S. Government Securities............. $ -- $4,219,268 $ 462,553
Strategic Bond......................... 759,467 619,329 (110,017)
Flexible Credit........................ -- -- --
The amounts of aggregate unrealized gain (loss) and the cost of investment
securities for federal tax purposes, including short-term securities,
repurchase agreements, and derivatives were as follows:
Aggregate Aggregate Unrealized
Unrealized Unrealized Gain/(Loss) Cost of
Fund Gain@ Loss@ Net@ Investments
---- ---------- ---------- ----------- -----------
U.S. Government Securities. 5,556,987 (1,613,461) 3,943,526 154,733,787
Strategic Bond............. 10,677,061 (7,092,293) 3,584,768 364,909,784
Flexible Credit Bond....... 9,236,196 (8,406,146) 830,050 370,273,052
--------
@ Unrealized appreciation (depreciation) includes amounts for derivatives.
Note 6. Capital Share Transactions
Transactions in capital shares of each class of each Fund were as follows:
U.S. Government Securities
--------------------------------------------------
Class A
--------------------------------------------------
For the
six months ended For the
September 30, 2017 year ended
(unaudited) March 31, 2017
------------------------ ------------------------
Shares Amount Shares Amount
---------- ------------ ---------- ------------
Shares
sold...... 1,127,061 $ 10,352,210 4,055,893 $ 39,020,448
Reinvested
dividends. 129,616 1,187,725 266,885 2,514,822
Shares
redeemed.. (1,843,204) (16,888,612) (4,412,102) (41,347,823)
---------- ------------ ---------- ------------
Net
increase
(decrease) (586,527) $ (5,348,677) (89,324) $ 187,447
========== ============ ========== ============
78
SunAmerica Income Funds
NOTES TO FINANCIAL STATEMENTS -- September 30, 2017 -- (unaudited)
(continued)
U.S. Government Securities
---------------------------------------------------
Class C
---------------------------------------------------
For the
six months ended For the
September 30, 2017 year ended
(unaudited) March 31, 2017
------------------------ -------------------------
Shares Amount Shares Amount
---------- ------------ ----------- ------------
Shares
sold.......... 84,905 $ 777,509 496,877 $ 4,737,214
Reinvested
dividends..... 9,730 89,119 25,679 242,231
Shares
redeemed...... (455,646) (4,176,024) (1,682,466) (15,715,340)
---------- ------------ ----------- ------------
Net
increase
(decrease).... (361,011) $ (3,309,396) (1,159,910) $(10,735,895)
========== ============ =========== ============
Strategic Bond
------------------------------------------------------------------------------------------------------
Class A Class B
--------------------------------------------------- -------------------------------------------------
For the For the
six months ended For the six months ended For the
September 30, 2017 year ended September 30, 2017 year ended
(unaudited) March 31, 2017 (unaudited) March 31, 2017
------------------------ ------------------------- ----------------------- ------------------------
Shares Amount Shares Amount Shares Amount Shares Amount
---------- ------------ ----------- ------------ ---------- ----------- ---------- ------------
Shares
sold(1)(2).... 6,366,009 $ 21,897,669 6,511,015 $ 22,000,676 536,661 $ 1,843,982 1,716,827 $ 5,807,472
Reinvested
dividends..... 755,732 2,601,969 1,469,857 4,968,423 101,009 347,732 193,765 654,711
Shares
redeemed(1)(2) (4,608,475) (15,841,668) (13,504,442) (45,597,698) (1,193,122) (4,100,573) (2,625,938) (8,845,950)
---------- ------------ ----------- ------------ ---------- ----------- ---------- ------------
Net
increase
(decrease).... 2,513,266 $ 8,657,970 (5,523,570) $(18,628,599) (555,452) $(1,908,859) (715,346) $ (2,383,767)
========== ============ =========== ============ ========== =========== ========== ============
Strategic Bond
------------------------------------------------------------------------------------------------------
Class C Class W
--------------------------------------------------- -------------------------------------------------
For the For the
six months ended For the six months ended For the
September 30, 2017 year ended September 30, 2017 year ended
(unaudited) March 31, 2017 (unaudited) March 31, 2017
------------------------ ------------------------- ----------------------- ------------------------
Shares Amount Shares Amount Shares Amount Shares Amount
---------- ------------ ----------- ------------ ---------- ----------- ---------- ------------
Shares
sold.......... 1,495,947 $ 5,164,330 3,384,955 $ 11,494,689 6,486,593 $22,299,248 7,913,680 $ 26,786,702
Reinvested
dividends..... 370,503 1,280,853 769,650 2,610,522 156,321 538,515 210,770 711,987
Shares
redeemed...... (7,957,029) (27,457,200) (12,514,751) (42,349,618) (2,403,451) (8,268,943) (5,405,846) (18,224,239)
---------- ------------ ----------- ------------ ---------- ----------- ---------- ------------
Net
increase
(decrease).... (6,090,579) $(21,012,017) (8,360,146) $(28,244,407) 4,239,463 $14,568,820 2,718,604 $ 9,274,450
========== ============ =========== ============ ========== =========== ========== ============
--------
(1)For the six months ended September 30, 2017, includes automatic conversion
of 87,663 shares of Class B shares in the amount of $300,871 to 87,567
shares of Class A shares in the amount of $300,871.
(2)For the year ended March 31, 2017, includes automatic conversion of 157,947
shares of Class B shares in the amount of $532,049 to 157,920 shares of
Class A shares in the amount of $532,049.
Flexible Credit
---------------------------------------------------
Class A
---------------------------------------------------
For the
six months ended For the
September 30, 2017 year ended
(unaudited) March 31, 2017
------------------------ -------------------------
Shares Amount Shares Amount
---------- ------------ ----------- ------------
Shares
sold...... 7,484,469 $ 25,801,863 22,917,210 $ 77,775,794
Reinvested
dividends. 876,708 3,025,811 1,592,354 5,426,357
Shares
redeemed.. (7,828,571) (26,963,694) (20,582,379) (69,973,319)
---------- ------------ ----------- ------------
Net
increase
(decrease) 532,606 $ 1,863,980 3,927,185 $ 13,228,832
========== ============ =========== ============
79
SunAmerica Income Funds
NOTES TO FINANCIAL STATEMENTS -- September 30, 2017 -- (unaudited)
(continued)
Flexible Credit
--------------------------------------------------------------------------------------------------------
Class C Class W
-------------------------------------------------- ----------------------------------------------------
For the For the
six months ended For the six months ended For the
September 30, 2017 year ended September 30, 2017 year ended
(unaudited) March 31, 2017 (unaudited) March 31, 2017
------------------------ ------------------------ ------------------------- -------------------------
Shares Amount Shares Amount Shares Amount Shares Amount
---------- ------------ ---------- ------------ ----------- ------------ ----------- ------------
Shares
sold...... 2,669,900 $ 9,258,756 7,200,951 $ 24,617,203 10,084,703 $ 34,802,663 32,285,891 $110,087,850
Reinvested
dividends. 302,970 1,051,706 543,420 1,863,435 530,766 1,831,934 855,066 2,917,568
Shares
redeemed.. (3,405,372) (11,798,916) (4,970,934) (16,999,023) (13,497,201) (46,525,877) (14,858,846) (50,678,526)
---------- ------------ ---------- ------------ ----------- ------------ ----------- ------------
Net
increase
(decrease) (432,502) $ (1,488,454) 2,773,437 $ 9,481,615 (2,881,732) $ (9,891,280) 18,282,111 $ 62,326,892
========== ============ ========== ============ =========== ============ =========== ============
Note 7. Line of Credit
The Trust has access to a $75 million committed unsecured line of credit
and, along with certain other funds managed by the Adviser, a $50 million
uncommitted unsecured line of credit. The committed and uncommitted lines of
credit are renewable on an annual basis with State Street, the Trust's
custodian. Interest is currently payable on the committed line of credit at
the higher of the Federal Funds Rate (but not less than zero) plus 125 basis
points or the One-Month London Interbank Offered Rate (but not less than
zero) plus 125 basis points and State Street's discretionary bid rate on the
uncommitted line of credit. The Trust, on behalf of each of the Funds, has
paid State Street for its own account, such Fund's ratable portion of an
upfront fee in an amount equal to $25,000 in the aggregate for the
uncommitted line of credit made available by State Street to certain other
funds managed by the Adviser, which are also party to the uncommitted line
of credit. There is also a commitment fee of 25 basis points per annum on
the daily unused portion of the committed line of credit. Borrowings under
the line of credit will commence when the respective Fund's cash shortfall
exceeds $100,000.00.
For the six months ended September 30, 2017, the following Funds had
borrowings:
Days Interest Debt Average
Fund Outstanding Charges Utilized Interest
---- ----------- -------- ---------- --------
Strategic Bond.. 2 $ 42 $ 302,934 2.48%
Flexible Credit. 8 1,030 1,866,393 2.48
At September 30, 2017, the following fund had an outstanding loan balance:
Fund Amount
---- ----------
Flexible Credit. $1,258,824
Note 8. Interfund Lending Agreement
Pursuant to the exemptive relief granted by the Securities and Exchange
Commission, the Funds are permitted to participate in an interfund lending
program among investment companies advised by SunAmerica or an affiliate.
The interfund lending program allows the participating Funds to borrow money
from and lend money to each other for temporary or emergency purposes. An
interfund loan will be made under this facility only if the participating
Funds receive a more favorable interest rate than would otherwise be
available from a typical bank for a comparable transaction. For the period
ended September 30, 2017, none of the Funds participated in this program.
Note 9. Investment Concentration
The Flexible Credit Fund's investment in high yield securities, whether
rated or unrated, may be considered speculative and subject to greater
market fluctuations and risk of loss of income and principal than
lower-yielding, higher-rated, fixed-income securities. The risk of loss due
to default by the issuer may be significantly greater for the holders of
high yield securities, because such securities are generally unsecured and
are often subordinated to other creditors of the issuer.
80
SunAmerica Income Funds
NOTES TO FINANCIAL STATEMENTS -- September 30, 2017 -- (unaudited)
(continued)
The Flexible Credit Fund and Strategic Bond Fund invest in participations
and assignments, or act as a party to the primary lending syndicate of a
variable rate senior loan interest to United States corporations,
partnerships, and other entities. If the lead lender in a typical lending
syndicate becomes insolvent, enters receivership or, if not FDIC insured,
enters into bankruptcy, a Fund may incur certain costs and delays in
receiving payment, or may suffer a loss of principal and/or interest. When a
Fund purchases a participation of a senior loan interest, the Fund typically
enters into a contractual agreement with the lender or other third party
selling the participation but not with the borrower directly. As such, a
Fund is subject to the credit risk of the borrower, selling participant,
lender or other persons positioned between the Funds and the borrower.
Each Fund may invest in obligations issued by agencies and instrumentalities
of the U.S. Government that may vary in the level of support they receive
from the government. The government may choose not to provide financial
support to government sponsored agencies or instrumentalities if it is not
legally obligated to do so, and if the issuer defaulted, a fund holding
securities of such issuer might not be able to recover its investment from
the U.S. Government. As a result of the U.S. Government Fund's concentration
in such investments, it may be subject to risks associated with U.S.
Government agencies or instrumentalities.
81
SunAmerica Income Funds
APPROVAL OF ADVISORY AGREEMENTS -- September 30, 2017 -- (unaudited)
Approval of the Investment Advisory and Management Agreement and Subadvisory
Agreements
The Board of Trustees (the "Board" the members of which are referred to as
"Trustees") of SunAmerica Income Funds (the "Trust"), including the Trustees
who are not "interested persons," as defined in Section 2(a)(19) of the
Investment Company Act of 1940, as amended (the "1940 Act") (the "Independent
Trustees"), of the Trust or its separate series (each, a "Fund," and
collectively, the "Funds"), SunAmerica Asset Management, LLC ("SunAmerica"),
PineBridge Investments LLC ("PineBridge") or Newfleet Asset Management, LLC
("Newfleet," and together with PineBridge, the "Subadvisers"), approved the
continuation of the Investment Advisory and Management Agreement between the
Trust, on behalf of the Funds, and SunAmerica (the "Advisory Agreement") for a
one-year period ending June 30, 2018 at an in-person meeting held on June 6-7,
2017 (the "Meeting"). The Trust currently consists of the following three
separate Funds: AIG Flexible Credit Fund ("Flexible Credit Fund"), AIG
Strategic Bond Fund ("Strategic Bond Fund") and AIG U.S. Government Securities
Fund ("U.S. Government Securities Fund").
At the Meeting, the Board, including the Independent Trustees, also approved
the continuation of the Subadvisory Agreement between SunAmerica and PineBridge
with respect to the Strategic Bond Fund and the Subadvisory Agreement between
SunAmerica and Newfleet with respect to the Flexible Credit Fund (the
"Subadvisory Agreements" and together with the Advisory Agreement, the
"Agreements") for a one-year period ending June 30, 2018.
In accordance with Section 15(c) of the 1940 Act, the Board requested, and
SunAmerica and the Subadvisers provided, materials relating to the Board's
consideration of whether to approve the continuation of the Agreements. These
materials included, as applicable: (a) a summary of the services provided or to
be provided, as applicable, by SunAmerica and its affiliates to the Funds and
by the Subadvisers; (b) information independently compiled and prepared by
Broadridge Financial Solutions, Inc. ("Broadridge"), an independent third-party
provider of mutual fund data, on fees and expenses of the Funds, and the
investment performance of the Funds as compared with a peer group of funds,
along with fee and performance data with respect to the Funds and any other
mutual funds or other accounts advised or subadvised by SunAmerica or the
Subadvisers with similar investment objectives and/or strategies, as
applicable; (c) information on the profitability of SunAmerica and its
affiliates, and a discussion relating to indirect benefits; (d) information
relating to economies of scale; (e) information about SunAmerica's general
compliance policies and procedures and the services it provides in connection
with its oversight of subadvisers; (f) information about SunAmerica's and the
Subadvisers' risk management processes; (g) information regarding brokerage and
soft dollar practices; and (h) information about the key personnel of
SunAmerica and its affiliates, and the Subadvisers, that are involved in the
investment management, administration, compliance and risk management
activities with respect to the Funds, as well as current and projected staffing
levels and compensation practices.
In determining whether to approve the continuation of the Agreements, the
Board, including the Independent Trustees, considered at the Meeting, and from
time to time as appropriate, factors it deemed relevant, including the
following information:
Nature, Extent and Quality of Services Provided by SunAmerica and the
Subadvisers. The Board, including the Independent Trustees, considered the
nature, extent and quality of services provided by SunAmerica. The Board noted
that the services include acting as investment manager and adviser to the
Funds, managing the daily business affairs of the Funds, and obtaining and
evaluating economic, statistical and financial information to formulate and
implement investment policies. Additionally, the Board observed that SunAmerica
provides office space, bookkeeping, accounting, legal, and compliance, clerical
and administrative services and has authorized its officers and employees, if
elected, to serve as officers or trustees of the Trust without compensation.
The Board also noted that SunAmerica is responsible for monitoring and
reviewing the activities of affiliated and unaffiliated third-party service
providers, including the Subadvisers. In addition to the quality of the
advisory services provided by SunAmerica, the Board considered the quality of
the administrative and other services provided by SunAmerica to the Funds
pursuant to the Advisory Agreement.
In connection with the services provided by SunAmerica, the Board analyzed the
structure and duties of SunAmerica's fund administration, accounting,
operations, legal and compliance departments and concluded that they were
adequate to meet the needs of the Funds. The Board also reviewed the personnel
responsible for providing advisory services to the Funds and other key
personnel of SunAmerica, in addition to current and projected staffing levels
and compensation practices. The Board concluded, based on its experience and
interaction with SunAmerica, that: (i) SunAmerica would continue to be able to
retain quality investment and other personnel; (ii) SunAmerica has exhibited a
high level of diligence and attention to detail in carrying out its advisory
and other responsibilities under the Advisory Agreement; (iii) SunAmerica has
been responsive to requests of the Board; and (iv) SunAmerica
82
SunAmerica Income Funds
APPROVAL OF ADVISORY AGREEMENTS -- September 30, 2017 -- (unaudited)
(continued)
has kept the Board apprised of developments relating to the Funds and the
industry in general. The Board concluded that the nature and extent of services
provided under the Advisory Agreement were reasonable and appropriate in
relation to the management fee and that the quality of services continues to be
high.
The Board also considered SunAmerica's reputation and long-standing
relationship with the Funds and considered the benefit to shareholders of
investing in funds that are part of a family of funds offering a variety of
types of mutual funds and shareholder services. The Board considered
SunAmerica's experience in providing management and investment advisory and
administrative services to advisory clients and noted that as of March 31,
2017, SunAmerica managed, advised and/or administered approximately
$83.9 billion in assets. In addition, the Board considered SunAmerica's code of
ethics and its commitment to compliance generally and with respect to its
management and administration of the Funds. The Board also considered
SunAmerica's risk management processes. The Board further observed that
SunAmerica has developed internal procedures for monitoring compliance with the
investment objectives, policies and restrictions of the Funds as set forth in
the Funds' prospectuses. The Board also reviewed SunAmerica's compliance and
regulatory history and noted that there were no material legal, regulatory or
compliance issues that would potentially impact SunAmerica in effectively
serving as the investment adviser to the Funds.
The Board also considered the nature, extent and quality of services provided
by each Subadviser to the applicable Funds. The Board observed that the
Subadvisers are responsible for providing day-to-day investment management
services, including investment research, advice and supervision, and
determining which securities will be purchased or sold by the Fund that each
Subadviser manages, subject to the oversight and review of SunAmerica. The
Board reviewed each Subadviser's history, structure, size, visibility and
resources, which are needed to attract and retain highly qualified investment
professionals. The Board reviewed the personnel that are responsible for
providing subadvisory services to the Funds, and other key personnel of each
Subadviser, in addition to current and projected staffing levels and
compensation practices, and concluded, based on its experience with the
Subadvisers, that each Subadviser: (i) has been able to retain high quality
portfolio managers and other investment personnel; (ii) has exhibited a high
level of diligence and attention to detail in carrying out its responsibilities
under the applicable Subadvisory Agreement; and (iii) has been responsive to
requests of the Board and of SunAmerica. In addition, the Board considered each
Subadviser's code of ethics and risk management processes. The Board further
observed that each Subadviser has developed internal policies and procedures
for monitoring compliance with the investment objectives, policies and
restrictions of the Funds as set forth in the Funds' prospectuses. The Board
also reviewed each Subadviser's compliance and regulatory history and noted
that there were no material legal, regulatory or compliance issues that would
potentially impact the Subadvisers from effectively serving as Subadvisers to
the Funds. The Board concluded that the nature and extent of services provided
by each Subadviser under the respective Subadvisory Agreement were reasonable
and appropriate in relation to the subadvisory fee and that the quality of
services continues to be high.
Investment Performance. The Board, including the Independent Trustees, also
considered the investment performance of SunAmerica and the Subadvisers with
respect to the Funds, as applicable. In connection with its review, the Board
received and reviewed information regarding the investment performance of the
Funds as compared to each Fund's peer group ("Peer Group") and/or peer universe
("Peer Universe") as independently determined by Broadridge and to an
appropriate index or combination of indices, including the Funds' benchmarks.
The Board was provided with a description of the methodology used by Broadridge
to select the funds in each Peer Group and Peer Universe.
The Board noted that performance information was for the periods ended
March 31, 2017. The Board also noted that it regularly reviews the performance
of the Funds throughout the year. The Board further noted that, while it
monitors performance of the Funds closely, it generally attaches more
importance to performance over relatively long periods of time, typically three
to five years.
Flexible Credit Fund. The Board considered that the Fund's performance was
above the medians of its Peer Group and Peer Universe for the one-, three- and
five-year periods. The Board further considered that the Fund outperformed its
Broadridge Index for the one-, three- and five-year periods. The Board
concluded that the Fund's performance was satisfactory.
Strategic Bond Fund. The Board considered that the Fund's performance was above
the medians of its Peer Group and Peer Universe for the one-year period and
below the medians of its Peer Group and Peer Universe for the three- and
five-year periods. The Board further noted that the Fund underperformed its
Broadridge Index for the one-, three- and five-year periods. The Board noted
management's discussion of the Fund's performance, including the Fund's
improved recent performance, and that the Board had approved certain changes to
the Fund's principal investment strategy effective July 29, 2014. The Board
concluded that the Fund's performance was being addressed.
83
SunAmerica Income Funds
APPROVAL OF ADVISORY AGREEMENTS -- September 30, 2017 -- (unaudited)
(continued)
U.S. Government Securities Fund. The Board considered that the Fund's
performance was below the medians of its Peer Group and Peer Universe for the
one-, three- and five-year periods. The Board also considered that the Fund
underperformed its Broadridge Index for the one-, three- and five-year periods.
The Board considered that management recently made a portfolio manager change
with respect to the Fund. The Board noted management's discussion of the Fund's
performance, including continued monitoring of the Fund and potential actions
to improve performance, and concluded that the Fund's performance was being
addressed.
Consideration of the Management Fees and Subadvisory Fee and the Cost of the
Services and Profits to be Realized by SunAmerica, the Subadvisers and their
Affiliates from the Relationship with the Funds. The Board, including the
Independent Trustees, received and reviewed information regarding the fees to
be paid by the Funds to SunAmerica pursuant to the Advisory Agreement and the
fees to be paid by SunAmerica to the Subadvisers pursuant to the Subadvisory
Agreements. The Board examined this information in order to determine the
reasonableness of the fees in light of the nature and quality of services to be
provided and any potential additional benefits to be received by SunAmerica,
the Subadvisers or their affiliates in connection with providing such services
to the Funds.
To assist in analyzing the reasonableness of the management fee for each of the
Funds, the Board received reports independently prepared by Broadridge. The
reports showed comparative fee information for each Fund's Peer Group and/or
Peer Universe as determined by Broadridge, including rankings within each
category. In considering the reasonableness of the management fee to be paid by
each Fund to SunAmerica, the Board reviewed a number of expense comparisons,
including: (i) contractual and actual management fees; and (ii) actual total
operating expenses. In considering each Fund's total operating expenses, the
Board analyzed the level of fee waivers and expense reimbursements and the net
expense caps contractually agreed upon by SunAmerica with respect to each Fund.
The Board further considered that, unlike the funds in each Peer Group and Peer
Universe, the fee waivers and/or reimbursements being made by SunAmerica with
respect to the Funds are only reflected in the total expenses category of the
Broadridge reports, rather than also being reflected as specific management fee
waivers in the actual management fee category of the Broadridge reports. As a
result, the Board took into account that the actual management fees presented
by Broadridge for the funds in each Peer Group and Peer Universe may appear
lower on a relative basis. The Board also considered the various expense
components of the Funds and compared each Fund's net expense ratio (taking into
account the contractual fee caps and waivers) to those of other funds within
its Peer Group and/or Peer Universe as a guide to help assess the
reasonableness of the management fee for the Funds. The Board acknowledged that
it was difficult to make precise comparisons with other funds in the Peer
Groups and Peer Universes since the exact nature of services provided under the
various fund agreements is often not apparent. The Board noted, however, that
the comparative fee information provided by Broadridge as a whole was useful in
assessing whether SunAmerica was providing services at a cost that was
competitive with other, similar funds.
The Board also considered the management fees received by SunAmerica with
respect to other mutual funds and accounts with similar investment strategies
to the Funds, to the extent applicable. The Board noted, however, that the
mutual funds identified as similar to the Funds are sold only in the variable
annuity market and, accordingly, are in different Broadridge classifications,
with peer groups consisting of funds underlying variable insurance products.
The Board then noted the management fees paid by the Funds were reasonable as
compared to the fees SunAmerica was receiving from other mutual funds and
accounts for which it serves as adviser or subadviser.
The Board also received and reviewed information regarding the fees paid by
SunAmerica to the Subadvisers pursuant to the Subadvisory Agreements. To assist
in analyzing the reasonableness of the subadvisory fees, the Board received a
report independently prepared by Broadridge. The report showed comparative fee
information of the Funds' Peer Groups and/or Peer Universes that the Board used
as a guide to help assess the reasonableness of the subadvisory fees. The Board
noted that Peer Group information as a whole was useful in assessing whether
the Subadvisers were providing services at a cost that was competitive with
other similar funds. The Board also considered that the subadvisory fees are
paid by SunAmerica out of its management fee and not by the Funds, and that
subadvisory fees may vary widely within a Peer Group for various reasons,
including market pricing demands, existing relationships, experience and
success, and individual client needs. The Board further considered the amount
of subadvisory fees paid out by SunAmerica and the amount of the management
fees which it retained and determined that these amounts were reasonable in
light of the services performed by SunAmerica and the Subadvisers, respectively.
The Board also considered fees received by the Subadvisers with respect to
other mutual funds and accounts with similar investment strategies to the Funds
for which they serve as adviser or subadviser, to the extent applicable. The
Board then noted that the subadvisory fee paid by SunAmerica to PineBridge was
reasonable as compared to fees PineBridge receives for other mutual funds
84
SunAmerica Income Funds
APPROVAL OF ADVISORY AGREEMENTS -- September 30, 2017 -- (unaudited)
(continued)
and accounts for which it serves as adviser or subadviser. The Board also noted
that Newfleet indicated that there are meaningful differences between the
Flexible Credit Fund and another subadvised account with a similar strategy.
Flexible Credit Fund. The Board considered that the Fund's actual management
fees were above the medians of its Peer Group and Peer Universe. The Board also
considered that the Fund's total expenses were above the medians of its Peer
Group and Peer Universe. The Board noted that the Fund's advisory fee contains
breakpoints and further noted management's discussion regarding the Fund's
expenses.
Strategic Bond Fund. The Board considered that the Fund's actual management
fees were above the medians of its Peer Group and Peer Universe. The Board also
considered that the Fund's total expenses were above the medians of its Peer
Group and Peer Universe. The Board noted that the Fund's advisory fee contains
breakpoints and further noted management's discussion regarding the Fund's
expenses.
U.S. Government Securities Fund. The Board considered that the Fund's actual
management fees were above the medians of its Peer Group and Peer Universe. The
Board also considered that the Fund's total expenses were above the medians of
its Peer Group and Peer Universe. The Board noted that the Fund's advisory fee
contains breakpoints and further noted management's discussion regarding the
Fund's expenses.
Profitability. The Board also considered SunAmerica's profitability and the
benefits SunAmerica and its affiliates received from its relationship with the
Funds. The Board received and reviewed financial statements relating to
SunAmerica's financial condition and profitability with respect to the services
it provided the Funds and considered how profit margins could affect
SunAmerica's ability to attract and retain high quality investment
professionals and other key personnel. The Board was also provided with a
profitability analysis that detailed the revenues earned and the expenses
incurred by SunAmerica and its affiliates that provide services to the Funds on
a Fund by Fund basis. The Board also considered the contractual fee waivers
and/or expense reimbursements agreed to by SunAmerica.
The Board considered the profitability of SunAmerica under the Advisory
Agreement, including the amount of management fees it retained after payment to
the Subadvisers, and considered the profitability of SunAmerica's affiliates
under the Rule 12b-1 Plans Service Agreements, and Administrative and
Shareholder Services Agreements. Additionally, the Board considered whether
SunAmerica, the Subadvisers and their affiliates received any indirect benefits
from the relationship with the Funds. Specifically, the Board observed that AIG
Federal Savings Bank, an affiliate of SunAmerica serves as custodian with
respect to certain shareholder retirement accounts that are administered by
SunAmerica and receives a fee payable by the qualifying shareholders. The Board
further considered whether there were any collateral or "fall- out" benefits
that SunAmerica and its affiliates may derive as a result of their relationship
with the Funds. The Board noted that SunAmerica believes that any such benefits
are de minimis and do not impact the reasonableness of the management fees.
The Board also reviewed the Subadvisers' financial statements and/or other
information and considered whether the Subadvisers had the financial resources
necessary to attract and retain high quality investment management personnel
and to provide a high quality of services.
The Board concluded that SunAmerica and the Subadvisers had the financial
resources necessary to perform their obligations under the Agreements and to
continue to provide the Funds with the high quality services that they had
provided in the past. The Board also concluded that the management fee and
subadvisory fee were reasonable in light of the factors discussed above.
Economies of Scale. The Board, including the Independent Trustees, considered
whether the shareholders would benefit from economies of scale and whether
there was potential for future realization of economies with respect to the
Funds. The Board considered that as a result of being part of the SunAmerica
fund complex, the Funds share common resources and may share certain expenses,
and if the size of the complex increases, each Fund could incur lower expenses
than they otherwise would achieve as stand-alone entities. The Board also took
into account that each of the Funds had management fee arrangements that
included breakpoints that will adjust the fee downward as the size of the Fund
increases, thereby allowing the shareholders to participate in any economies of
scale. The Board concluded that the Funds' management fee structure was
reasonable and that it would continue to review fees in connection with the
renewal of the Advisory Agreement, including whether the implementation of
additional breakpoints would be appropriate in the future due to an increase in
asset size or otherwise.
85
SunAmerica Income Funds
APPROVAL OF ADVISORY AGREEMENTS -- September 30, 2017 -- (unaudited)
(continued)
The Board noted that the Subadvisory Agreements included breakpoints, but did
not review specific information regarding whether there have been economies of
scale with respect to the Subadvisers' management of the Funds because it
regards that information as less relevant at the subadviser level. Rather, the
Board considered information regarding economies of scale in the context of the
renewal of the Advisory Agreement.
Other Factors. In consideration of the Agreements, the Board also received
information regarding SunAmerica's and the Subadvisers' brokerage and soft
dollar practices. The Board considered that SunAmerica and the Subadvisers are
responsible for decisions to buy and sell securities for the applicable Funds,
selection of broker-dealers and negotiation of commission rates. The Board
noted that it receives reports from SunAmerica and from an independent third
party which include information on brokerage commissions and execution
throughout the year. The Board also considered the benefits SunAmerica and the
Subadvisers derive from their soft dollar arrangements, including arrangements
under which brokers provide brokerage and/or research services to SunAmerica
and/or the Subadvisers in return for allocating brokerage; however, the Board
noted that the securities in which the Funds invest are traded primarily in the
over-the-counter market on a "net" basis with dealers acting as principal for
their own accounts without a stated commission (although the price of the
security usually includes a profit to the dealer) and, therefore, the Funds
generally do not incur brokerage commissions. Accordingly, the Board observed
that SunAmerica and the Subadvisers typically would not receive soft dollar
benefits in return for allocating the Funds' brokerage transactions. The Board
further observed that when making purchases of new issues with fixed
underwriting fees, SunAmerica or the Subadvisers may designate the use of
broker-dealers who have agreed to provide certain statistical, research and
other information.
Conclusion. After a full and complete discussion, the Board approved the
Agreements, each for a one-year period ending June 30, 2018. Based upon their
evaluation of all these factors in their totality, the Board, including the
Independent Trustees, was satisfied that the terms of the Agreements were fair
and reasonable and in the best interests of the Funds and the Funds'
shareholders. In arriving at a decision to approve the Agreements, the Board
did not identify any single factor or group of factors as all-important or
controlling, but considered all factors together, and each Independent Trustee
may have attributed different weights to different factors. The Independent
Trustees were also assisted by the advice of independent legal counsel in
making this determination.
86
[LOGO]
AIG Funds
Harborside 5
185 Hudson Street, Suite 3300
Jersey City, NJ 07311
Trustees VOTING PROXIES ON DISCLOSURE OF
Richard W. Grant TRUST PORTFOLIO QUARTERLY PORTFOLIO
Peter A. Harbeck SECURITIES HOLDINGS
Dr. Judith L. Craven A description of the The Trust is required
William F. Devin policies and to file its com-plete
Stephen J. Gutman proce-dures that the schedule of portfolio
Officers Trust uses to holdings with the U.S.
John T. Genoy, President determine how to vote Securities and
James Nichols, Vice proxies relating to Exchange Commission
President secu-rities held in a for its first and
Kara Murphy, Vice Fund's portfolio, third fiscal quarters
President which is available in on Form N-Q. The
Christopher C. Joe, the Trust's Statement Trust's Forms N-Q are
Chief Compliance of Additional available on the
Officer Information, may be U.S. Securities and
Gregory N. Bressler, ob-tained without Exchange Commis-sion
Secretary charge upon request, website at
Kathleen Fuentes, Chief by calling (800) www.sec.gov. You can
Legal Officer and 858-8850. The also review and obtain
Assistant Secretary in-formation is also copies of the Forms
Gregory R. Kingston, available from the N-Q at the U.S.
Treasurer EDGAR database on the Securities and
Donna McManus, Vice U.S. Secu-rities and Exchange Commission
President and Exchange Commission's Public Refer-ence Room
Assistant Treasurer website at in Washington DC
Shawn Parry, Vice http://www.sec.gov. (information on the
President and DELIVERY OF operation of the
Assistant Treasurer SHAREHOLDER DOCUMENTS Public Reference Room
Matthew J. Hackethal, The Funds have adopted may be ob-tained by
Anti-Money Laundering a policy that allows calling
Compliance Officer them to send only one 1-800-SEC-0330).
Investment Adviser copy of a Fund's PROXY VOTING RECORD ON
SunAmerica Asset prospectus, proxy SUNAMERICA INCOME FUNDS
Management, LLC material, annual Information regarding
Harborside 5 report and semi-annual how the Funds voted
185 Hudson Street, Suite report (the proxies relating to
3300 "shareholder securities held in the
Jersey City, NJ 07311 documents") to Funds during the most
Distributor shareholders with recent twelve month
AIG Capital Services, multiple accounts period ended June 30
Inc. residing at the same is available, once
Harborside 5 "household." This filed with the U.S.
185 Hudson Street, Suite practice is called Securities and
3300 householding and Exchange Commission,
Jersey City, NJ 07311 reduces Fund expenses, without charge, upon
Shareholder Servicing which benefits you and request, by calling
Agent other shareholders. (800) 858-8850 or on
AIG Fund Services, Inc. Unless the Funds the U.S. Securities
Harborside 5 receive instructions and Exchange
185 Hudson Street, Suite to the con-trary, you Commission's website
3300 will only receive one at http://www.sec.gov.
Jersey City, NJ 07311 copy of the This report is
Custodian and Transfer shareholder documents. submitted solely for
Agent The Funds will the general
State Street Bank and continue to household information of
Trust Company the share-holder shareholders of the
One Lincoln Street documents Funds. Distribution of
Boston, MA 02111 indefinitely, until we this report to persons
are instructed other than
otherwise. If you do shareholders of the
not wish to Funds is authorized
participate in only in con-nection
householding please with a currently
contact Shareholder effective pro-spectus,
Services at (800) setting forth details
858-8850 ext. 6010 or of the Funds, which
send a written request must precede or
with your name, the accom-pany this report.
name of your fund(s) The accompanying
and your account report has not been
number(s) to AIG Funds audited by independent
c/o BFDS, P.O. Box accountants and
219186, Kansas City accordingly no
MO, 64121-9186. We opinions have been
will resume expressed thereon.
in-dividual mailings
for your account
within thirty (30)
days of receipt of
your request.
Go Paperless!!
Did you know that you have the option to
receive your shareholder reports online?
By choosing this convenient service, you will no longer receive paper copies of
Fund documents such as annual reports, semi-annual reports, prospectuses and
proxy statements in the mail. Instead, you are provided with quick and easy
access to this information via the Internet.
Why Choose Electronic Delivery?
It's Quick -- Fund documents will be received faster than via traditional mail.
It's Convenient -- Elimination of bulky documents from personal files.
It's Cost Effective -- Reduction of your Fund's printing and mailing costs.
To sign up for electronic delivery, follow
these simple steps:
1 Go to www.aig.com/funds
2 Click on the link to "Go Paperless!!"
The email address you provide will be kept strictly confidential. Once your
enrollment has been processed, you will begin receiving email notifications
when anything you receive electronically is available online.
You can return to www.aig.com/funds at any time to change your email
address, edit your preferences or to cancel this service if you choose to
resume physical delivery of your Fund documents.
Please note - this option is only available to accounts opened through the
Funds.
For information on receiving this report online, see inside back cover.
AIG Funds are advised by SunAmerica Asset Management, LLC (SAAMCo) and
distributed by AIG Capital Services, Inc. (ACS), Member FINRA. Harborside 5,
185 Hudson Street, Suite 3300, Jersey City, NJ 07311, 800-858-8850. SAAMCo and
ACS are members of American International Group, Inc. (AIG).
This fund report must be preceded by or accompanied by a prospectus.
Investors should carefully consider a Fund's investment objectives, risks,
charges and expenses before investing. The prospectus, containing this and
other important information, can be obtained from your financial adviser, the
AIG Funds Sales Desk at 800-858-8850, ext. 6003, or at aig.com/funds. Read the
prospectus carefully before investing.
aig.com/funds
INSAN - 9/17
[LOGO]
Item 2. Code of Ethics.
Not applicable.
Item 3. Audit Committee Financial Expert.
Not applicable.
Item 4. Principal Accountant Fees and Services.
Not applicable.
Item 5. Audit Committee of Listed Registrants.
Not applicable.
Item 6. Investments.
Included in Item 1 to the Form.
Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End
Management Investment Companies.
Not applicable.
Item 8. Portfolio Managers of Closed-End Management Investment Companies.
Not applicable.
Item 9. Purchases of Equity Securities by Closed-End Management Investment
Company and Affiliated Purchasers.
Not applicable.
Item 10. Submission of Matters to a Vote of Security Holders.
There were no material changes to the procedures by which shareholders
may recommend nominees to the registrant's Board of Trustees that were
implemented after the registrant last provided disclosure in response
to the requirements of Item 407(c)(2)(iv) of Regulation S-K (17 CFR
229.407) (as required by 22(b)(15)) of Schedule 14A (17 CFR 240.14a-
101), or this Item 10.
Item 11. Controls and Procedures.
(a) An evaluation was performed within 90 days of the filing of this
report, under the supervision and with the participation of the
registrant's management, including the President and Treasurer, of the
effectiveness of the design and operation of the registrant's
disclosure controls and procedures (as defined in Rule 30a-3(c)
under the Investment Company Act of 1940 (17 CFR 270.30a-3(c))). Based
on that evaluation, the registrant's management, including the
President and Treasurer, concluded that the registrant's disclosure
controls and procedures are effective.
(b) There was no change in the registrant's internal control over financial
reporting (as defined in Rule 30a-3(d) under the Investment Company Act
of 1940 (17 CFR 270.30a-3(d))) that occurred during the registrant's
last fiscal quarter of the period covered by this report that has
materially affected, or is reasonably likely to materially affect, the
registrant's internal contro1 over financial reporting.
Item 12. Disclosure of Securities Lending Activities for Closed-End Management
Investment Companies.
Not applicable.
Item 13. Exhibits.
(a) (1) Not applicable.
(2) Certifications pursuant to Rule 30a-2(a) under the Investment
Company Act of 1940 (17 CFR 270.30a-2(a)) attached hereto as Exhibit
99.CERT.
(3) Not applicable.
(b) Certification pursuant to Rule 30a-2(b) under the Investment Company
Act of 1940 (17 CFR 270.30a-2(a)) and Section 906 of the Sarbanes-
Oxley Act of 2002 attached hereto as Exhibit 99.906.CERT.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, the registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
SunAmerica Income Funds
By: /s/ John T. Genoy
-----------------------
John T. Genoy
President
Date: December 07, 2017
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.
By: /s/ John T. Genoy
-----------------------
John T. Genoy
President
Date: December 07, 2017
By: /s/ Gregory R. Kingston
-----------------------
Gregory R. Kingston
Treasurer
Date: December 07, 2017